Bill > HB1361

This bill modifies Indiana's tax code regarding the treatment of discharged student loan debt for income tax purposes. Specifically, the bill amends the state's existing tax law to limit the add-back of forgiven federal student loan debt to only the 2021 taxable year, meaning that for student loan debt forgiven in subsequent years (starting in 2022), taxpayers will not be required to add back the forgiven amount to their adjusted gross income. The change is found in section (a)(30) of the tax code, where the language is modified to <ins>specify that the add-back applies only for taxable years beginning after December 31, 2020, and before January 1, 2022</ins>. This modification effectively provides tax relief for Indiana residents whose student loans are discharged in tax years after 2021, aligning the state tax treatment more closely with potential federal student loan forgiveness programs. The bill ensures that taxpayers will not face additional state tax liability for student loan debt forgiven in years subsequent to 2021.

Budget and Finance

https://iga.in.gov/legislative/2025/bills/house/1361/details