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Committee lays over bill clarifying coerced-debt relief won’t be treated as taxable income
Summary
Representative Norris presented House File 385, which clarifies that debt relief obtained under the 2023 coerced-debt statute should not be treated as taxable income for state tax purposes or used in calculating renter or property tax-credit eligibility; the committee laid the bill over for possible inclusion.
Representative Norris presented House File 385, a technical bill intended to follow up on the 2023 coerced-debt law that allows survivors of domestic violence to obtain court relief from debts they incurred under coercion. House members heard that, without clarification, Department of Revenue guidance suggested forgiven coerced debt could be treated as taxable income (Form 1099-C) and could affect eligibility for renter and property tax credits. The bill would…
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