The welcome news that the government is forgiving student debt for many may have a downside for residents of a few states that treat forgiven debt as income, Accounting Today reported.

The news comes from a study by the Tax Foundation, which found that six states "appear to be on track to tax student loan date forgiveness": Arkansas, Massachusetts, Minnesota, Mississippi, North Carolina and Wisconsin. The Tax Foundation originally reported that there were 13 such states, but its article "was updated on August 30th to address recent state administrative determinations and correct errors in the preliminary analysis of states with the potential to tax student loan debt forgiveness."

Gothamist reported that New York state, which was originally listed as one of the 13, will not tax loan forgiveness, as its Department of Taxation and Finance confirmed that it will not count the forgiven loans as income. New York state Sens. Michael Giannaris (D-Queens) and Brad Hoylman (D-Manhattan) declared that they will introduce a bill codifying that policy into law.

Under the terms of President Joe Biden’s plan, Pell Grant recipients with Department of Education (DOE)-provided loans can see their debts of up to $20,000 cancelled. Borrowers without Pell Grants can see their debts of up to $10,000 cancelled. Unmarried borrowers are eligible for this relief if their individual incomes are less than $125,000; married borrowers are eligible if their joint incomes are less than $250,000.

Borrowers with forgiven student loans can escape federal tax liabilities because of a measure in the 2021 American Rescue Plan that “would temporarily exempt canceled student debt from taxation,” according to Accounting Today. Previously, the federal tax code “generally treat(ed) forgiven debt as income.”