Extension and Modification of Exclusion from Gross Income of Student Loans Discharged on Account of Death or Disability
Section 70119 · Sec. 70119 ·
What this chapter is about
This part keeps a wiped out student loan from counting as income. It applies where the loan is cleared on death or lasting disability. Private student loans are covered too. A social security number must be on the return.
The document says “shall not”Who acts: Secretary of the TreasuryHow: statuteSec. 70119 in the PDF
What the document says
“gross income does not include any amount which (but for this subsection) would be includible in gross income for such taxable year by reason of the discharge (in whole or in part) of any loan described in subparagraph (B)”
The section rewrites section 108(f)(5) of the Internal Revenue Code of 1986 so that an individual's gross income does not include an amount that would otherwise be counted because a loan was discharged in whole or in part, where the discharge was under subsection (a) or (d) of section 437 of the Higher Education Act of 1965 or the parallel benefit under part D of title IV of that Act, under section 464(c)(1)(F) of that Act, or otherwise on account of the student's death or total and permanent disability. A loan is covered if it is a student loan as defined in paragraph (2) or a private education loan as defined in section 140(a) of the Consumer Credit Protection Act.
What the document actually says
“gross income does not include any amount which (but for this subsection) would be includible in gross income for such taxable year by reason of the discharge (in whole or in part) of any loan described in subparagraph (B)”
That sentence, in plain words
A loan that is wiped out does not count as income. That holds whether it is cleared in full or in part.
What this is about
The loan must be cleared for one of three reasons. Death is one. Total and lasting disability is another. Private student loans count too.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall not”Who acts: Secretary of the TreasuryHow: statuteSec. 70119 in the PDF
What the document says
“Subparagraph (A) shall not apply with respect to any discharge during any taxable year unless the taxpayer includes the taxpayer's social security number on the return of tax for such taxable year.”
The section denies the exclusion for a discharge in a taxable year unless the taxpayer puts a social security number on the return for that year, with social security number taking the meaning given in section 24(h)(7). It also adds a new subparagraph (X) to section 6213(g)(2) treating the omission of a correct number as a mathematical or clerical error.
What the document actually says
“Subparagraph (A) shall not apply with respect to any discharge during any taxable year unless the taxpayer includes the taxpayer's social security number on the return of tax for such taxable year.”
That sentence, in plain words
The break is not given unless a number is on the return. That is the taxpayer's own social security number.
What this is about
Leaving it out counts as a math error. That label matters for how the return is fixed. The tax code is not indexed here.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall apply”Who acts: Secretary of the TreasuryHow: statuteSec. 70119 in the PDF
What the document says
“The amendments made by this section shall apply to discharges after December 31, 2025.”
The section applies its amendments to discharges after December 31, 2025.
What the document actually says
“The amendments made by this section shall apply to discharges after December 31, 2025.”
That sentence, in plain words
The changes reach loans cleared after December 31, 2025.
What this is about
Loans cleared before then are not touched. The old rules still hold for them. The date is fixed in the law.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
Each distinct thing the section does: the rewritten exclusion and the three kinds of discharge it covers, the loans it reaches, the social security number requirement and the treatment of an omission as a math error, and the effective date.
The mechanical edits that strike an and and replace a period so a new subparagraph could be added.
The section works by rewriting section 108(f)(5) of the Internal Revenue Code of 1986 and points to the Higher Education Act of 1965 and the Consumer Credit Protection Act, none of which is indexed here.
