Mississippi will be first state to tax Biden’s student loan debt forgiveness plan

Mississippi has confirmed it will be the first state to tax President Joe Biden’s student loan debt forgiveness plan of up to $20,000.

According to Bloomberg, Mississippi will tax residents who have had portions of their student loan debt forgiven as income.

While it would be exempted from federal taxes, a recent analysis by the Tax Foundation learned that it could be subjected to some individual state taxes.

From Newsmax:

In contrast, New York, Virginia, and Pennsylvania have already introduced tax exemptions for residents who qualify for the debt forgiveness, according to Bloomberg.

However, other states — including Arkansas and Wisconsin — are also considering taxing forgiven student loan debt.

Arkansas’ Department of Finance and Administration told Bloomberg that it was “reviewing whether debt forgiveness in this scenario, via executive order, is subject to state income tax,” saying it would decide on the matter in the next few days.

Meanwhile, the Wisconsin Department of Revenue told Bloomberg that it would deal with the topic in its upcoming biennial budget.

Recent analysis suggests taxpayers will be on the hook for as much as $600 billion over the next ten years.