I saw an article today on Yahoo Finance that the income taxes are no longer being forgiven for borrowers in IDR. That seems like a lot of income being reflected because of the forgiveness. How much is typically being forgiven?
PSLF forgiveness is still tax free
Posted by bhalter80
2 Comments
Yes, IDR forgiveness is no longer tax free as of January 1, 2026. This was the norm before the American Rescue Plan Act in 2021. Although IDR forgiveness wasn’t really happening on a large scale until recently because of the timing of possible eligibility and the different IDR plans. So this will be a new idea for many.
Whatever outstanding balance a borrower has left when they reach forgiveness is forgiven. That amount is different for every borrower.
I’m not sure there is any data on this yet