If you downloaded the 2021 Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals), before February 16, 2022, please be advised that the information in the "Student Loans" section has been revised to reflect a distinction between the new provision that allows for exclusion of canceled debt from gross income, for tax years 2021 through 2025, and the pre-existing provision that excludes loan cancellation from gross income if certain work requirements are met, as described below. Generally, if you are responsible for making loan payments, and the loan is canceled or re-paid by someone else, you must include the amount that was canceled or paid on your behalf in your gross income for tax purposes. However, in certain circumstances, you may be able to exclude amounts from gross income as a result of the cancellation or repayment of certain student loans, including student loan cancellation due to meeting certain work requirements; cancellation of certain loans after December 31, 2020, and before January 1, 2026; or certain student loans canceled as a result of a student loan repayment assistance program. To qualify for the work-related exclusion, your loan must be made by a qualified lender to assist you in attending an eligible educational organization described in section 170(b)(1)(A)(ii) and must be pursuant to a provision in the student loan that all or part of the debt will be canceled if you work for a certain period of time, in certain professions, and for any of a broad class of employers. The American Rescue Plan Act of 2021 modified the treatment of student loan forgiveness for discharges in 2021 through 2025. Generally, if you are responsible for making loan payments, and the loan is canceled or repaid by someone else, you must include the amount that was canceled or paid on your behalf in your gross income for tax purposes. However, in certain circumstances, you may be able to exclude this amount from gross income if the loan was a loan for postsecondary educational expenses, a private education loan, a loan from an educational organization described in section 170(b)(1)(A)(ii), or a loan from an organization exempt from tax under section 501(a) to refinance a student loan. Please download the publication again for the revised text.
