Federal Student Loan Forgiveness Or Repayment Programs Not Effective For Wisconsin

The federal Internal Revenue Service (IRS) announced that recipients of student loan relief under a state loan repayment or forgiveness program that rewards health care professionals who work in underserved or health professional shortage areas may qualify for refunds on their 2009 federal income tax returns. The health care professionals must have included the amount of loan forgiven or repayment as income on their 2009 federal income tax return. Amended returns may be filed for federal purposes due to a provision in the federal Patient Protection and Affordable Care Act (P.L. 111-148). The provision in this Act provides that such amounts are excluded from federal income, effective for taxable years beginning in 2009 and thereafter.

As of June 17, 2010, Wisconsin has not adopted the provisions of P.L. 111-148. Therefore, the exclusion from income for the forgiveness or repayment of loans under these circumstances does not apply for Wisconsin, unless the Wisconsin Legislature adopts the provision in P.L. 111-148 for Wisconsin income tax purposes at some future time. Therefore, Wisconsin Department of Revenue cannot accept amended returns for health care professionals who work in underserved or health professional shortage areas to exclude the income from loan repayment or forgiveness.

Page last updated June 29, 2010