2023-23: Governor signs retroactive tax relief for students

AB 111 (Ch. 23-5), which provides tax relief for current and former college students, has been signed by the Governor.

The bill retroactively excludes from gross income:

  • Student loan discharges for all qualified student loans discharged in taxable years beginning on or after January 1, 2021, and before January 1, 2026. This conforms California to the federal exclusion enacted by the American Rescue Plan Act for these tax years;
  • Discharges of certain unpaid community college fees, applicable retroactively to tax years beginning after on or after January 1, 2022, and before January 1, 2027; and
  • Higher Education Emergency Grant funds received by students in postsecondary education to support their expenses and financial needs related to the COVID-19 pandemic that were authorized in the CARES Act, the Consolidated Appropriations Act of 2021, and the American Rescue Plan Act. This exclusion applies retroactively beginning to taxable years beginning on or after January 1, 2020, and before January 1, 2028.
A detailed analysis of this bill, along with instructions on what practitioners will have to do to help clients take advantage of this retroactive relief, will be available in the next issue of Spidell’s California Taxletter

AB 111 is available at:


Subscribe to Spidell’s California Taxletter to get more information on this bill and other California legislation. Click here for details.

Sign up for Spidell’s Flash E-mail — Get breaking news delivered to your inbox, plus other free analysis and information for tax professionals. Join our community and stay at the top of your game. Click here to sign up.