Cancellation of Education Loans
If you have qualified education loans discharged, you may be to subtract the entire amount discharged from your income. By doing this, you would not pay Minnesota income tax on the amount discharged.
You may qualify if your qualified education loan is discharged after completing a federal income-based repayment plan. Types of discharged student loans that may qualify include:
• Minnesota Teacher Shortage Loan Repayment Program
• Income-based repayment plans
• Income-contingent repayment plans
• Pay As You Earn (PAYE) or Revised Pay As You Earn (REPAYE) programs
Your discharged debt must be included in your federal taxable income to qualify.
Claim the Subtraction
Complete Schedule M1M, Income Additions and Subtractions, to claim this subtraction from Minnesota income.