Adopting the federal student loan forgiveness tax exclusion for state tax purposes. (FE)
If enacted, SB984 would create a significant alteration in how student loan forgiveness is treated under state tax law, thereby alleviating potential tax burdens for individuals benefiting from student loan relief. This could encourage more individuals to pursue loan forgiveness options, knowing that they wouldn't face increased tax liability at the state level for such forgiveness. Additionally, this bill may benefit state legislators' goals of addressing student debt issues in Wisconsin, making higher education more accessible for future generations.
Senate Bill 984 aims to adopt the federal student loan forgiveness tax exclusion for state tax purposes, allowing individuals who receive student loan debt relief to also benefit from a tax exclusion at the state level. This bill aligns with the provisions of the American Rescue Plan Act of 2021, which currently provides similar benefits, but is set to expire after the 2025 tax year. By extending the tax exclusion beyond this date at the state level, the bill seeks to offer continued support for individuals dealing with student loan debt relief in Wisconsin.
Notable points of contention surrounding SB984 may include discussions regarding the fiscal implications for state revenue, as extending the tax exclusion could lead to reduced tax income. Critics may argue about balancing state budgets while offering tax relief. Supporters, however, may emphasize the importance of supporting individuals facing the burden of student loans and the positive economic impacts of relieving such debt. There may also be debates regarding whether such financial policies effectively assist individuals or if they disproportionately benefit specific demographics.