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Federal Income Tax Liability

The LSU Law Center cannot give any applicants legal advice as to whether loan repayment assistance funds must be treated as taxable income. Applicants should consult with independent tax professionals regarding potential tax consequences from program participation.

The LSU Law Center reasonably believes it has structured this LRAP so that the award may not be considered taxable income to the recipient, and thus may not have to be reported as such.

Recipients remain solely responsible for any federal, state or local income tax liability that they (and their spouse/domestic partner, if applicable) may incur because of loan forgiveness awards.

It is the LSU Law Center’s understanding that amounts received by law graduates participating in a LRAP are currently exempt from federal income tax. [§108 (f), IRC] In Louisiana, up to $5000 in annual LRAP funding is currently considered tax-exempt.