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  1. #1
    Join Date
    Dec 2019
    Location
    Michigan
    Posts
    4

    Default Student Loan Disability Discharge State of Michigan Taxes

    I receive disability. I was just approved for a loan discharge for total and permanent disability. The papers they sent stated that the loan discharge total will not be taxed as income federally but could for certain states

    I live in Michigan. Im not a veteran. I can't find information on whether or not Michigan will consider it as taxable income. My loan was for 35k



    Thanks for any help

  2. #2
    Join Date
    Oct 2006
    Posts
    15,931

    Default Re: Student Loan Disability Discharge State of Michigan Taxes

    Quote Quoting Meg37
    View Post
    I receive disability. I was just approved for a loan discharge for total and permanent disability. The papers they sent stated that the loan discharge total will not be taxed as income federally but could for certain states

    I live in Michigan. Im not a veteran. I can't find information on whether or not Michigan will consider it as taxable income. My loan was for 35k



    Thanks for any help
    I don't practice in Michigan but I am able to do Michigan returns. In reviewing both the forms and the instructions, I cannot find anything that requires cancelled debt that was excluded federally, to be added back into income for Michigan state purposes.

  3. #3
    Join Date
    Mar 2013
    Posts
    17,475

    Default Re: Student Loan Disability Discharge State of Michigan Taxes

    I came to the same conclusion:

    https://www.michigan.gov/documents/t...0_642214_7.pdf

    Line 10 - starts with your federal AGI. Lines 11 and 13 adjust for Michigan Schedule 1 which does not ask about debt cancellation nor does Page 12 of the instruction booklet nor do I find anywhere else in the booklet that mentions debt cancellation.

    https://www.michigan.gov/documents/t...s_642357_7.pdf

    If your cancelled debt does not have to be included as income on your federal taxes, it doesn't appear to have to be included in your Michigan taxes.

  4. #4
    Join Date
    Dec 2019
    Location
    Michigan
    Posts
    4

    Default Re: Student Loan Disability Discharge State of Michigan Taxes

    Thank you both for taking the time to look that up. I wrote the Michigan treasury too just to be sure. Definitely am hopeful now. Appreciate your time

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