Taxability of student loans forgiven under the PSLF and other loan programs has been a hot topic lately. Does anyone know of resources that illustrate how loan forgiveness is treated on state income taxes? I am particularly interested in California tax treatment.

I received this from the Franchise Tax Bd of CA:
Certain student loans provide that if the taxpayer works for a specified period of time in a certain profession, all or part of the student loan may be canceled. The amount of canceled debt is not included as income if the loan is from any of the following:

  Federal, state, or local governments
  A tax-exempt public benefit corporation that has assumed control of a state, county, or municipal hospital, and whose employees are considered public employees under state law
  An educational institution under an agreement with an entity described above that provided the funds to the institution to make the loan
  Loans canceled after August 5, 1997, if it was made by an educational institution as part of a program to encourage students to serve in occupations or areas with unmet needs and under which the services provided are for or under the direction of a governmental unit or tax-exempt organization
  Student loans canceled under the California State University’s Forgivable Loan Program

From August 6, 1997 through December 31, 1997, California did not conform to the exclusion of student loans canceled by an educational institution. The excluded income should be added back on the FTB Schedule CA (540).

I don’t know of a source that gathers and compares how different states treat “cancellation of debt income” as it’s often known but I’ll poke around some.  The California law the FTB of CA points out would seem to control the question in your case though, right?  It looks like you’d need to research not only the current law but the law that was in effect when you excluded the cancellation from income, no?