September 30, 2022
  • September 30, 2022

North Carolina governor wants loan forgiveness exempt from state tax

By on September 14, 2022 0

RALEIGH, N.C. (AP) — North Carolina Governor Roy Cooper wants the General Assembly to pass legislation exempting individuals from state income tax on the student loan forgiveness announced by President Joe Biden last month.

The White House said the value of that rebate — up to $20,000 for some — is exempt from federal income tax, citing language in the 2021 U.S. bailout law. But Carolina North appears to be one of six states where the amounts would be subject to state tax unchanged.

The Democratic governor pointed out that the General Assembly passed legislation in 2021 that exempted Paycheck Protection Program loans for businesses from state income tax and allowed recipients to deduct expenses paid with these loans.

“Republican lawmakers have been quick to help businesses and should now right this fundamental injustice for many hard-working people who will be hit hard by this,” Cooper said in a press release Wednesday. North Carolina’s personal income tax rate of 4.99% drops to 4.75% in 2023.

The General Assembly’s main business period for the year ended on 1 July. Since then, lawmakers have held monthly three-day administrative sessions. The next such meeting will take place next week. Legislators have the power to review substantive legislation during these sessions.