Will my forgiven student loan amount affect my Healthcare tax credit based on MAGI
My student loan debt was forgiven. I understand that on a federal level it is exempt from being counted as taxable income; However, I have been unable to get a clear answer on whether it will be counted towards MAGI and will affect the amount of my healthcare tax credit. I do live in a state that taxes the forgiven debt, if that makes any difference. Thank you.
Answers
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Sab_m_b
That is a great question!
Your Premium Tax Credit is figured based on your household income.
Household income is the modified adjusted gross income (modified AGI) of you and your spouse (if filing a joint return) plus the modified AGI of each individual whom you claim as a dependent and who is required to file an income tax return.
Based on the 2023 instructions for Form 8962, the modified AGI calculation does not require you to include federally tax-exempt debt forgiveness.
See page 6:
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Thank you so much for this answer
