Student loan discharge for 100% P&T vets

FightLikeAGirl

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Just an FYI. If you are 100% P&T through the VA, you can submit an application to discharge your student loans. The amount will be used as taxable income for this year so do some research before applying.

I applied in May and just received word that my loans were discharged by the Department of Education.

https://disabilitydischarge.com/
 
Just an FYI. If you are 100% P&T through the VA, you can submit an application to discharge your student loans. The amount will be used as taxable income for this year so do some research before applying.

I applied in May and just received word that my loans were discharged by the Department of Education.

https://disabilitydischarge.com/
Also, a 100% P&T rating is not required. Any 100% rating should be granted discharge, or an IU finding.
 
Also is you are on SSDI you can get them discharged, or if you can find a doctor to sign paperwork stating that you are disabled an cannot work.
 
Also, a 100% P&T rating is not required. Any 100% rating should be granted discharge, or an IU finding.
Very true! Also SSDI recipients are eligible.

Edit - whoops, I see @gsfowler mentioned that! Thank you!
 
Are there any exceptions to paying taxes on the discharged amounts
 
Also is you are on SSDI you can get them discharged, or if you can find a doctor to sign paperwork stating that you are disabled an cannot work.

Are there any exception to including it as taxable income?
 
Re: student loans I sent the loan server my VA rating and my loans were discharged...but I had to pay taxes on the discharged loan amounts...
 
Supposedly this changed with the new tax bill. If your loans are discharged after 12/31/2017, they are not taxable. Sunset is in 2026.
 
Omg that is so fantastic, I am so.....happy for you....can you provide the source of information so we can pass it along.....or is it in the IRS guide....
 
I'm sure it's in some IRS guide by now. This is the text of the bill:

https://www.congress.gov/bill/115th-congress/house-bill/1/text

PART IV—EDUCATION
SEC. 11031. TREATMENT OF STUDENT LOANS DISCHARGED ON ACCOUNT OF DEATH OR DISABILITY.

(a) In General.—Section 108(f) is amended by adding at the end the following new paragraph:
“(5) DISCHARGES ON ACCOUNT OF DEATH OR DISABILITY.—
“(A) IN GENERAL.—In the case of an individual, gross income does not include any amount which (but for this subsection) would be includible in gross income for such taxable year by reasons of the discharge (in whole or in part) of any loan described in subparagraph (B) after December 31, 2017, and before January 1, 2026, if such discharge was—
“(i) pursuant to subsection (a) or (d) of section 437 of the Higher Education Act of 1965 or the parallel benefit under part D of title IV of such Act (relating to the repayment of loan liability),
“(ii) pursuant to section 464(c)(1)(F) of such Act, or
“(iii) otherwise discharged on account of the death or total and permanent disability of the student.
“(B) LOANS DESCRIBED.—A loan is described in this subparagraph if such loan is—
“(i) a student loan (as defined in paragraph (2)), or
“(ii) a private education loan (as defined in section 140(7) of the Consumer Credit Protection Act (15 U.S.C. 1650(7))).”.
(b) Effective Date.—The amendment made by this section shall apply to discharges of indebtedness after December 31, 2017.
 
I am having to prove insolvency for my loans, which were discharged in November of 17.

I wonder if there is any resources for me to use this new ruling by the IRS?

Amazing they finally fixed this.
 
Short answer: not under the language of the bill.

But I would check with a qualified tax professional or attorney anyway. I haven't actually seen this in application since it became law given the length of the discharge process, so there isn't much precedent by which to judge.
 
Short answer: not under the language of the bill.

But I would check with a qualified tax professional or attorney anyway. I haven't actually seen this in application since it became law given the length of the discharge process, so there isn't much precedent by which to judge.
Yea it is so new, I just spoke to a CPA about my tax implications and the form for insolvency, and he said "I cant believe you guys have to pay taxes on something like this, the law needs changed."

Well now it is!
 
Are there downfalls of being insolvent? Can't be a good thing
 
Are there downfalls of being insolvent? Can't be a good thing
I'm sure it would hurt your ability to acquire a loan at a favorable rate.
 
I am having to prove insolvency for my loans, which were discharged in November of 17.

I wonder if there is any resources for me to use this new ruling by the IRS?

Amazing they finally fixed this.

Did you actually get a 1099C for the discharge of the debt?
 
Just an FYI. If you are 100% P&T through the VA, you can submit an application to discharge your student loans. The amount will be used as taxable income for this year so do some research before applying.

I applied in May and just received word that my loans were discharged by the Department of Education.

https://disabilitydischarge.com/
We’re you unemployable?
 
That’s awesome news bc on the paperwork it says unemployable so I wasn’t sure about that. Thank you.
 
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