North Carolina says it will tax Biden's student-loan forgiveness, and 3 more states are likely to follow suit

Student-loan forgiveness will be considered taxable income in North Carolina, the state's Department of Revenue said on Wednesday. 

Although the Biden administration's student-loan-forgiveness plan is exempt from federal tax, the debt relief is triggering some individual state taxes.

In North Carolina, student-loan relief is taxable because the state has not fully adopted a specific section of the Internal Revenue Code. Congress used the provision — Section 108(f)(5) — to exempt forgiven student loans from between 2015 and 2021 from federal taxes as part of the American Rescue Plan Act.