What you need to know about California and Student Loans

California is leading the charge in helping people with their student loan debt. For the federal government and in other states, student debt that has been canceled or forgiven is treated as taxable income.

So if a borrower has $90k forgiven, that adds $90k to their taxable income for that year. However, California has expanded income tax exclusion for canceled or forgiven student loan debt.

Starting in 2017 and lasting until January 1st, 2022, the exclusion applies to federal loan plans such as:

While this will not affect the tax status of student loan benefit such as those offered by student loan genius, California’s bill is a big step in the right direction, helping those crushed by student loan debt.

If you’re a California resident, reach out to your local representative to learn more about Assembly Bill No. 461 – Chapter 525.

If you’ve got questions we can help with, please contact us.

SEE ALL ARTICLES

Student Loan Repayments And Taxes

Student loan benefits are becoming the premiere perk a company can offer and for good reason: Employees stay with their company longer, which increases retention, and HR directors are able to bring in more capable talent.

But, as companies dive into student loan repayments, one question seems to go unasked: Who pays the taxes?

Because student loan repayment is a newer benefit, there’s ambiguity around who pays the tax. With Vault, a company has three options, assuming an employee receives a contribution of $100 per month:

Whatever tax option you choose, the smallest extra payment towards a student loan makes a difference in your employee’s lives.

SEE ALL ARTICLES