Under the new tax law, are PLUS loans no longer taxable if discharged due to permanent disability?

by Carlo J. Silvesti, CPA | Feb 26, 2018

I have read that under the new tax law student loans discharged because of total and permanent disability are no longer taxable. Does this include PLUS loans as well?

Under the Tax Cuts and Jobs Act, all public and private student loans discharged due to total and permanent disability will no longer be treated as income for tax purposes. Thus, if the student signed for the PLUS loan, the discharged student debt due to total and permanent disability will not be taxable.

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Answered by: Carlo J. Silvesti, CPA, is an assistant professor of accounting at Gwynedd Mercy University in Gwynedd Valley, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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