ST.PAUL, Minn. — Governor Tim Walz supports exempting student loan debt forgivenness from state taxes, a spokesperson said. Minnesota’s tax code defines such forgiven loans as taxable income, although the federal tax code does not. Changing the state tax code would require a special session of the Legislature soon to create an exception before 2022 taxes are due. Only the Legislature can create such an exemption. And only the governor can convene a special session. The loan relief program, proposed by President Biden, would erase $10,000 to $20,000 in college loan indebtedness for low-income and middle-income borrowers. As Minnesota law now stands, the tax relief could increase individual borrowers’ tax liability as much as $1,970.
Earlier: Reluctant Nelson favors relief for college borrowers