May I declare my student loans as income?

Paying for College
1

Two reasons:

  1. The taxes I would pay would be less than the health care credit I would get by passing $11,500.
  2. I’m in a lower tax bracket now, so maybe I’d pay less tax during repayment.

Can it work that way? I know we don’t have to declare them as income, but I wonder if I can.

Thanks.

2

I think the health care income has to be earned income. Check that before you declare this as it would be unearned income.

3

I’m not sure what you’re asking. To my knowledge, student loans are never considered taxable income. They aren’t income at all, actually. The only way a loan can produce taxable income for the borrower is if the creditor forgives the loan.

4

How much do you have to earn (truly earn) in order to take the health care credit?

5

I have to make $11,500 to get the credit. A dollar less and I pay full premiums. My state did not expand medicaid, but it does require all college students to buy health insurance regardless of our income levels. Paying taxes on income is less than the cost of the insurance after the credit.

6

Oh, I missed that you are talking about LOANS. I thought you were talking about grants and scholarships. Loans are not income. You will have to pay for your health premiums. Yes, it is totally unfair that someone who makes nothing pays more than someone who has a job and makes $20k or so, but that’s how the subsidies work, especially in the non-medicaid expansion states. Your cheapest option may be buying through the school. Not great insurance but usually cheaper than on the ACA exchanges without subsidies.

7

Loans are never income, bcs the money is not for keeps. U have to give it back.

8

^^ Except forgiven debt. That can be income, but again, unearned income.

9

This is an unfortunate scenario. It’s sounds like a situation where someone could essentially lie and claim that they earned XXXX dollars babysitting (cash), and then somehow qualify for what this OP wants? If so, that is a nutty situation.

10

Mom2. For health insurance subsidy purposes, this is evaluated annually. If the person still falls within the guidelines, they get the break. If not, they have to pay.

I think this student is hoping to earn enough to continue to get health insurance with a subsidy since her state is not a Medicaid expansion state.

11

You can not claim it as income.

12

How much money are you talking about needing to get to the threshold?

13

In non-medicaid expansion states, it is 100% of the poverty level (OP indicates $11500 for a single) and in medicaid expansion states it’s a little higher (137%?). This is how ACA set up the subsidies, because it was assumed by congress that anyone in the 0-137% group would have medicaid.

It is unfair and congress needs to fix it.

14

This is nutty because if it’s cheaper to pay taxes on $11.5, than pay for this health thing, then people will just lie and claim earnings (mowed lawns, babysitting, whatever cash earnings) pay the taxes on it, and get the health

15

I wonder if that scenario is more or less common than the people who actually do babysit, mow lawns, etc. and don’t report that as earned income? Inflating income on the tax return isn’t a new problem though; people have been incentivized to do that in the past to qualify for the Earned Income Tax Credit or the Child Tax Credit

Anyway, taxpayers can’t elect to treat student loans as earned income or taxable income.

I’m not sure what this part means either. You would get a deduction for the student loan interest that you pay on student loans for qualified education expenses but that would happen regardless of what happens with your health insurance or whether you personally consider student loans to be income.

16

Half the states didn’t expand medicaid. Also, the medicaid in a few of those states is so bad that it can’t serve those already on it, never mind all the additional adults who would be eligible. If expanding medicaid makes you eligible but you get no care, does that really help?

Seems it would be better for the feds to expand ACA to everyone, with subsidies starting at $0 income. Then poor adults in all states would receive the same thing. Medicaid should be better because it has no (or very low) deductibles, but the supreme court said states don’t have to expand medicaid.

But none of this will help the OP, who needs to buy insurance now. His best bet is through the school.

17

Moderator’s note:
Please do not let this morph into a political discussion