I have a client whose spouse passed away in 2017 and received a 1099-C for the spouse’s cancelled student loan debt. I treated the COD income as Federal and California taxable. The July 2019 CA tax letter on page 6 re: TCJA conformity says:
“California conforms to the TCJA provision allowing taxpayers to exclude the amount of student loan indebtedness discharged on or after December 31, 2011, due to the death or disability of the student. Unlike federal law, the California exclusion is available indefinitely. Federal law only allows the exclusion for the 2018 through 2025 tax years”.
Is the 2011 reference above correct? If so, appears that I need to amend the CA return to exclude it from income. Additionally, was this exclusion from income available in 2017 or was this part of the TCJA conformity that just passed? Thanks for any feedback.