Student Loan Forgiveness

Forum|Forum|3 years ago
August 25, 2022
2 replies
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Indications are my 22 year old daughter will be ineligible for $10,000 loan forgiveness only because I claimed her in 2021 as a dependent for the $500 "other dependents" credit. If this is the case should I file an amended return to remove her as a dependent then repay the $500 so she can claim the $10,000? (Probably should wait for details first though.

DoninGA

You need to wait for the details for this announcement. Especially since there are going to be legal challenges on whether the President even has the legal authority to do this type of government loan forgiveness.

StikmanAuthor

Thanks. Most definitely need to wait. I was not impacted by stimulus payouts but find similar depended claim disqualifications were addressed by amended returns. Just a factor to keep in mind at this point.

NCPERSON1

@Stikman - does your 2020 or 2021 income exceed the limits for student debt relief? ($125,000 for single filer and $250,000 for joint filers)? From what I read, the dependent remains eligible for student debt relief if YOUR income is below these limits.

And it is not clear how the Student Loan Servicers are going to figure all this out - they will NOT be able to access the IRS records.

Also, and what you wrote wasn't clear, but if you amended your return to disclaim a dependent that was really a dependent so that the dependent could claim more stimulus money, that is fraud...(and while you always have the right to claim or not claim a dependent, the fraud is by the dependent who unchecks the "I can be claimed by some one else" box when the can certainly be claimed by someone else). hopefully that is not what I read in your statement.

NCPERSON1

New York Times:

"Current students may also be eligible, though if you are claimed as a dependent by someone else, your eligibility will be based on that person’s income and not your own."