North Carolina to Tax Student Loan Forgiveness | Eastern North Carolina Now

    Publisher's Note: This post appears here courtesy of the John Locke Foundation. The author of this post is Brian Balfour.

    As reported by WSOC-TV, North Carolina's Department of Revenue announced this week that the state will consider federal funds received as student loan "forgiveness" as taxable income:

    "The North Carolina Department of Revenue said Wednesday that the state considers student loan forgiveness as taxable income. That means you could be paying hundreds of dollars or have your tax refund reduced by hundreds after you file your taxes."

    Also important to note here that in addition to lowering and flattening rates, the North Carolina General Assembly has increased the standard deduction for taxes over the past several years. The state's income tax structure was changed in 2013 from a progressive system topping out at 7.75% to a flat rate of 5.8%. The rate has since been further reduced to the current 5.25%, and the FY 2021-22 budget scheduled the rate to fall to 3.99% after 2026.

    Also in 2013, the standard deduction was increased from $6,000 to $15,000 for married filers. The deduction has likewise been increased in subsequent years, with last year's budget increasing it to $25,500 for married filers. The result is more low-income households paying no state income taxes.

    For those receiving student loan "forgiveness" who are upset about the news that it will be subject to state tax, you can be thankful that the tax burden will be less than it would be without the last decade of tax reforms.

poll#160

Are you in favor of the Joe Biden Executive Order, just weeks before the midterm elections, to shift the Higher Education debt, of up to $10,000.00 per individual, to the taxpayers of this Republic (estimated at 1/2 trillion)?

  Yes, it costs so much to go to college, and the right job is so hard to find in my focus of study.

  No, one's individual debt should be born by the beneficiary of that debt; certainly NOT by others that work to support their own families and pay their own debts, and their taxes.

  I am bereft of knowledge, so who cares?

456 total vote(s)     What's your Opinion?

poll#154

Inarguably, the policies of the Democrats in congress and Joe Biden as the Executive is plunging the United States into a recession, if we are not already there; a recession that was completely avoidable. Will abrupt changes in policies occur in time?

  Yes, the Democrats have a bold plan, yet to be revealed, to save us.

  No, there will have to be a complete undoing of the damage done by these Democrats.

  I can't do simple math, so how am I to understand the concept of basic economics.

1,216 total vote(s)     What's your Opinion?