Senate approves bipartisan Polistina bill allowing disabled veterans to repay student loans tax-free
Disabled veterans whose debt was discharged under the Total and Permanent Disability Release program would not be subject to taxes thanks to bipartisan legislation sponsored by Sen. Vince Polistina (R-Atlantic) and Sen. Vin Gopal (D – Monmouth) which was approved today by the New Jersey Senate.
“Some veterans have suffered significant disabilities in the performance of their duties, including paralysis, loss of sight or severe psychological trauma. The last thing they need to worry about is how they are going to afford to pay taxes on the debt released,” Polistina (R-2) said. “This legislation will ensure that New Jersey’s disabled veterans will never have to pay taxes on released student loan debt and will provide financial relief and stability to these injured veterans during their time of need.”
Under current law, discharge of debt is not subject to New Jersey gross income tax and is not reportable by the taxpayer.
The bill, S-3051/A-655, would codify this treatment as it applies specifically to certain federal student loans of a disabled veteran who saw this debt discharged through the discharge program. for total and permanent disability from the United States Department of Education.
Debt forgiveness, including amounts discharged through the federal Total and Permanent Disability Discharge Program, is currently not subject to New Jersey gross income tax.
New Jersey Senate Republicans