NEW YORK (Reuters) – The U.S. government will greatly simplify the process by which borrowers of a $525-billion-pandemic-relief fund do not have to repay some of the smallest loans, the Department of Treasury said.
In a statement issued late on Thursday, the Department of Treasury said businesses that borrowed $50,000 or less from the Paycheck Protection Program (PPP) can sign a one-page document attesting that the money was spent as required by the program and the loans will be forgiven, meaning taxpayers’ dollars will be used to pay for them.
Introduced in April to help companies weather the economic shutdown brought on by COVID-19, the PPP was responsible for 5.21 million loans ranging from less than $50,000 each to more than $5 million. The rules stipulated that businesses with limited financing options could seek a loan that would later be fully forgiven if at least 60 percent was spent on
Those breathing a sigh of relief that their student loan debt is now in line with their income may want to re-evaluate the guidelines that set the income based payment in the first place. There could be a tax time bomb looming, slowly ticking away. And with America’s focus on student loan debt and job security, defusing it is not a big part of the policy discussion in Washington at the moment… but we have been keeping a watchful eye and our projections might shock you…
Should You Have to Pay Taxes on Forgiven Student Loan Debt?
If you’re enrolled in the income-based repayment program, should you have to pay income taxes on the loan balance that the government dismisses?
This potential tax bill is a byproduct of federal efforts, including the newly expanded income-based repayment program, that allow you to limit the monthly payments on most federal loans to … Read More