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H 3226

Minimum wage

2025-2026 Regular Session Introduced by Gilda Cobb-Hunter and 1 co-sponsor

Excludes from Massachusetts gross income the student loan forgiveness for permanently and totally disabled veterans (IRC 108(f)(5)(A)(iii)).

Referred to Committee on Labor, Commerce and Industry
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Bill Summary · H 3226

Summary — H.3226 (House Docket No. 3688) — “An Act excluding student loan forgiveness from taxable income for permanently and totally disabled veterans”

Purpose

The bill would amend Massachusetts personal income tax law to exclude from state taxable income certain student loan forgiveness amounts received by veterans who are permanently and totally disabled. Its intent is to prevent those loan discharges from being taxed by the Commonwealth even where federal law would otherwise treat the discharge as income.

Key provisions

  • Amends paragraph (2) of subsection (a) of section 2 of chapter 62 (Massachusetts personal income tax exemptions) by adding a new subparagraph (R).
  • Subparagraph (R) provides that any amount received by a veteran who is permanently and totally disabled that would be includible in gross income by reason of the discharge of an educational loan under Internal Revenue Code section 108(f)(5)(A)(iii) shall be excluded from Massachusetts gross income for that taxable year.

Legal/reference detail

  • The exclusion references federal tax code section 108(f)(5)(A)(iii), which pertains to discharge of certain student loans for veterans with service-connected disabilities. The bill makes the federal exclusion explicit for Massachusetts taxable income for qualifying veterans.

Who is affected

  • Directly affected: veterans who are certified as permanently and totally disabled and who receive student loan discharges described in IRC 108(f)(5)(A)(iii). For those individuals, the forgiven amounts would not increase their Massachusetts taxable income.
  • Indirectly affected: the Department of Revenue (administration of returns), tax preparers, and the Commonwealth’s revenue collections.

Fiscal and administrative impact

  • The change would reduce state taxable income for eligible veterans and thus could reduce state income tax revenue to some degree. The number of affected taxpayers is likely limited (veterans meeting the permanently-and-totally-disabled criterion who receive qualifying loan discharges), so the fiscal impact is likely modest, though the bill contains no fiscal estimate.
  • Administrative impact on the Department of Revenue is expected to be minor (application of an exclusion on affected returns).

Procedural status and timeline

  • Prefiled: 12/05/2024
  • Introduced and read first time (MA House): 01/14/2025
  • Referred to Committee on Labor, Commerce and Industry: 01/14/2025
  • Referred to Committee on Revenue: 02/27/2025
  • Senate concurred: 02/27/2025
  • Hearing scheduled (Revenue): 06/24/2025, 10:30 AM–1:00 PM in A‑2
  • Current status (as provided): Referred to Committee on Labor, Commerce and Industry.

Notes

  • The bill text supplied contains unrelated draft language from a South Carolina minimum wage proposal; that material is not part of Massachusetts H.3226 and appears to be included in error. The operative Massachusetts provision is the single added subparagraph excluding qualifying student loan discharges for permanently and totally disabled veterans.

Compiled from official sources — confirm details with the bill’s official record.

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