Mississippi · Student Loan Forgiveness Tax Exclusion
Student Loan Forgiveness Tax Exclusion in Mississippi (2026)
Student loan forgiveness discharged through 2025 is excluded from taxable income under the American Rescue Plan Act provision. Mississippi has a flat 4% income tax, so a Mississippi filer's combined marginal rate on the next dollar at $48,610 of income is about 16% (12% federal + 4% MS).
2026 savings example for Mississippi
Planning estimate for a single filer earning $48,610 (Mississippi median household income in LevyIO's state dataset) who removes $5,000 from taxable income. Federal tax uses the 2026 IRS brackets after the $16,100 standard deduction; MS tax uses the state brackets in LevyIO's dataset and assumes the state follows the federal treatment.
Estimated total savings
$800
Federal savings
$600
$3,653 → $3,053 · 12% bracket
MS state savings
$200
$1,452 → $1,252 · 4% marginal
Combined marginal rate
16%
≈ $160 saved per $1,000 deducted
Federal × Mississippi marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The MS column is the state marginal rate at the midpoint of each range. The last column is the tax saved per $1,000 deducted at that combined rate.
| Federal bracket | Gross income (single) | MS marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 4% | 14% | $140 |
| 12% | $28,500 - $66,500 | 4% | 16% | $160 |
| 22% | $66,500 - $121,800 | 4% | 26% | $260 |
| 24% | $121,800 - $217,875 | 4% | 28% | $280 |
| 32% | $217,875 - $272,325 | 4% | 36% | $360 |
| 35% | $272,325 - $656,700 | 4% | 39% | $390 |
| 37% | Over $656,700 | 4% | 41% | $410 |
Eligibility & forms
Borrowers with student loans forgiven through 2025
- Loan forgiveness through 12/31/2025 is tax-free
- Applies to federal and private student loan forgiveness
- Includes income-driven repayment plan forgiveness
Federal forms: Form 1099-C, Form 1040
Mississippi filing notes
Use the 2026 4% rate above $10,000, not older 4.4% or 4.7% assumptions. Standard deduction is $2,300 single / $4,600 married. Verify retirement exclusions and current forms before filing.
Common mistakes: Not knowing forgiveness may be taxable after 2025; Confusing PSLF (always tax-free) with other programs; Not planning for potential state tax on forgiveness.
Frequently asked questions
How much can the Student Loan Forgiveness Tax Exclusion save a Mississippi taxpayer in 2026?
In LevyIO's example, a single filer with $48,610 of income (the Mississippi median household income in our state dataset) who removes $5,000 from taxable income saves about $600 in 2026 federal tax (12% marginal bracket) plus about $200 in Mississippi tax (4% state marginal rate), roughly $800 combined. It is a planning estimate computed from the 2026 IRS brackets and LevyIO's MS bracket data, not a survey figure.
What is the Mississippi income tax rate for 2026?
Mississippi has a flat 4% income tax. The MS standard deduction in LevyIO's dataset is $2,300 single / $4,600 married. Tax year 2026 rate: 0% on first $10,000 of taxable income and 4% above $10,000. Low property taxes and low cost of living.
Who qualifies for the Student Loan Forgiveness Tax Exclusion in Mississippi?
Borrowers with student loans forgiven through 2025. The federal rules are the same in every state; the requirements are: Loan forgiveness through 12/31/2025 is tax-free; Applies to federal and private student loan forgiveness; Includes income-driven repayment plan forgiveness. Mississippi filers should confirm on the MS return whether the state follows the federal treatment.
Which forms do I file to claim the Student Loan Forgiveness Tax Exclusion?
Federal: Form 1099-C, Form 1040. Mississippi: check the Mississippi Department of Revenue instructions for the matching state schedule. Common mistakes: Not knowing forgiveness may be taxable after 2025; Confusing PSLF (always tax-free) with other programs; Not planning for potential state tax on forgiveness.
Student Loan Forgiveness Tax Exclusion in other states
- Full Student Loan Forgiveness Tax Exclusion guide (all states)
- Student Loan Forgiveness Tax Exclusion in Alabama
- Student Loan Forgiveness Tax Exclusion in California
- Student Loan Forgiveness Tax Exclusion in Delaware
- Student Loan Forgiveness Tax Exclusion in Illinois
- Student Loan Forgiveness Tax Exclusion in Massachusetts
Sources
Reviewed 2026-09-17. Estimates are educational planning figures computed from the IRS 2026 inflation adjustments and LevyIO's state bracket dataset; they are not tax advice.