U.S. student loans · Taxes
Student loan forgiveness tax calculator.
Choose how the debt was cancelled, enter the amount and your rates. See how much is taxable and the estimated tax.
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The short answer
Forgiven student loan debt is cancellation-of-debt income unless an exception applies. IRS Topic 431 lists student loan discharges after December 31, 2020 and before January 1, 2026 as excepted; forgiveness after that date is not on that list, so it is generally taxable unless another exclusion, such as insolvency, applies. Example: $60,000 forgiven in 2026, debts of $90,000 and assets of $70,000. You were insolvent by $20,000.00, so $40,000.00 is taxable, which at 24% federal and 5% state is $11,600.00.
The exceptions. IRS Topic 431 (page updated 24 September 2026) lists, among cancellation-of-debt exceptions: certain qualified student loans with cancellation based on length of employment in certain professions, certain student loan discharges after December 31, 2020 and before January 1, 2026, cancellation due to death or total and permanent disability of the student, and amounts received or forgiven under certain student loan repayment assistance programs. It also lists exclusions including debt canceled to the extent you are insolvent.
What this tool leaves out. It applies one flat rate to the taxable amount. A large forgiven amount can push income into higher brackets, so the real federal tax can be higher. It does not check whether a given program meets the IRS conditions, other exclusions, or reporting forms. Use a tax professional for the return.
Frequently asked questions
Is student loan forgiveness taxable?
It depends on when and how the debt was cancelled. IRS Topic 431 excepts discharges after December 31, 2020 and before January 1, 2026, and death or disability discharges. Outside the exceptions it is generally income, and state rules vary.
What is the insolvency exclusion?
Per IRS Topic 431, canceled debt is excluded to the extent you are insolvent. This tool measures it as debts minus assets just before the cancellation, capped at the forgiven amount.
Does this give my exact tax?
No. It multiplies the taxable amount by the rates you enter. Brackets, credits and state law can change the result.
Where do I find my marginal rate?
Use the federal tax brackets page on this site with your taxable income, and your state’s rate schedule.
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Estimate only
This is not tax advice. Tax rules and program terms change; confirm with a tax professional or the IRS.