Bill would exempt federal student loan relief from state taxes
A new bill introduced Monday would exempt up to $20,000 in federal student debt relief from California state taxes.
Assemblymember Mike Fong, D-Alhambra, introduced the bill, AB 26, which aims to maximize the benefits of federal student debt relief proposed by President Joe Biden.
Biden’s plan would forgive up to $20,000 for individuals with federal student debt. The proposal, however, has stalled in the courts. Its fate will be determined by the United States Supreme Court, which last week agreed to take up the case.
“Federal student loan debt relief is a crucial piece of California’s economic recovery from the COVID-19 pandemic. AB 26 ensures that Californians who qualify for federal student loan debt relief will not pay state taxes. We must do all that we can to support the millions of Californians who are working hard to get back on their feet and contribute to the economy,” Fong said in a statement.