Pingree, Roskam, Kind, Costello, Introduce the Stop Taxing Death & Disability Act
Washington, D.C. — Today, U.S. Representatives Chellie Pingree (D-ME), Peter J. Roskam (R-IL), Ron Kind (D-WI), and Ryan Costello (R-PA) introduced the Stop Taxing Death and Disability Act. The bill, which previously passed unanimously through the Ways & Means Committee in the 114th Congress, would eliminate a cruel tax penalty levied against families that accept student loan forgiveness following the death or permanent disability of a family member.
“The loss of a child or the sudden disability of a loved one takes an unimaginable toll on any family. The federal government offers to forgive student loan debt in these circumstances," said Congresswoman Chellie Pingree. "Forgiving that debt is the right thing to do, and in the process, it does not create a windfall that these families should be taxed for. Congress has the power to put this harsh practice to an end and I think we should do so without delay.”
Pingree has introduced this bill twice before to provide relief for constituents in this situation, including the family of Keegan Brennen of Topsham. Keegan grew up in Maine and attended Mt. Ararat High School before studying illustration and creative writing at the New Hampshire Institute of Art, where he graduated in 2012. The following November, he passed away suddenly at the age of 22. His parents, Nora and Donald, suddenly owed over $25,000 in federal taxes and over $6,300 in state taxes after student loans they had co-signed for Keegan were forgiven.
The federal government forgives certain student loan debt accrued by individuals who die or suffer permanent disability. The IRS, however, treats the loan forgiveness as income—it becomes a taxable event. Grieving families, already dealing with the emotional and financial burdens of a tragic event, are slapped with a tax bill that could reach into the tens of thousands of dollars.
In the U.S. Senate, a companion bill has been introduced by Senators Rob Portman (R-OH), Chris Coons (D-DE), and Angus King (I-ME).