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Student loan repayments made to an individual are not considered taxable income if received from any of the following: • The National Health Service Corps Loan Repayment Program • A state education loan repayment program eligible for funds under the Public Health Service Act • Any other state loan repayment programs that are intended to provide for an increased availability of health services in underserved or health professional shortage areas.
Student Loan debt that is discharged, forgiven, or cancelled is generally treated as taxable income to the borrower and included in MAGI. The Tax Cuts and Jobs Act provided an exception to this rule for tax years 2018 through 2025. Student loan debt discharged on account of the death or permanent and total disability of the student is not included in the income. Such discharged debt is not counted in determining the MAGI-based household income of the borrower or other members of the borrower’s household. 2866.00.00 REVERSE MORTGAGES A reverse mortgage is a mortgage contract that allows a homeowner, age 62 or older, to borrow a percentage of the appraised value of his home. The homeowner then receives either a periodic payment or a line of credit which does not have to be repaid if he lives in the home. 2866.05.00 REVERSE MORTGAGES (MED 1, 2, 4) The proceeds from a reverse mortgage are not counted as income in the month received. However, if they are retained into the following month, they must be evaluated as resources. Another reverse mortgage arrangement consists of the purchase of an annuity and is called a reverse annuity mortgage (RAM). Annuity payments from a reverse annuity mortgage are counted as unearned income. 2866.10.00 REVERSE MORTGAGES (MED 3) For MAGI, the IRS does not distinguish between the different types of reverse mortgages when determining taxable income but sets forth that the monthly advances received from a reverse mortgage are not taxable income, so they are not included in the calculation of MAGI for purposes of determining household income.