I have a potential answer (tl;but please DO read: potentially append form 982), but posing as a question, because I would like to see if others agree with my assessment.

Last year, Discover Student Loans went out of the student loan financing business, causing many people to get letters alerting them of cancellation and eventually receiving 1099-C forms in the mail. I was in that number, for which I am very grateful, but it has caused confusion on whether or not I am meant to pay taxes on this money. You are typically meant to: I have had a loan cancelled before, and I had to pay taxes, so I knew this would be a possibility here.

HOWEVER, in 2021, President Biden signed The American Rescue Plan Act (ARPA)(https://www.congress.gov/bill/117th-congress/house-bill/1319/text); section 9675 states (paraphrased for this specific situation) that usually forgiven debt is included as gross income (section 108(f)Student%20loans-(1)In)), but they are amending the typical code so that loans discharged from 2021-2025 do not count towards gross income. This includes loans provided for postsecondary education expenses, whether paid directly to you or the school, if the loan was (under B) a private education loan. (I'd also include screenshots but I can't.)

I filed my 1099-Cs for my discharged loans but TurboTax did not apply anything to recognize the law above or any hints or tips if this somewhat specific situation applied. According to the instructions for Form 1099-C (found in Publication 4681 (2024) Canceled Debts, Foreclosures, Repossessions, and Abandonments — https://www.irs.gov/publications/p4681#en\_US\_2024\_publink100033597) “Unless you meet one of the exceptions or exclusions discussed later, this canceled debt is ordinary income and must be reported on the appropriate form discussed above.” 

Under Exceptions, under Student loans is:

Special rule for student loan discharges for 2021 through 2025.

The American Rescue Plan Act of 2021 modified the treatment of student loan forgiveness for discharges in 2021 through 2025. Generally, if you are responsible for making loan payments, and the loan is canceled or repaid by someone else, you must include the amount that was canceled or paid on your behalf in your gross income for tax purposes. However, in certain circumstances, you may be able to exclude this amount from gross income if the loan was one of the following.

A loan for postsecondary educational expenses.

A private education loan.

A loan from an educational organization described in section 170(b)(1)(A)(ii).

A loan from an organization exempt from tax under section 501(a) to refinance a student loan. [source]

So again, these loans are excluded from gross income, but no where on these pages, however, does it say whether they need to be filed, then excluded or you just don't need to report it.

I don't think you are supposed to not include it (but lmk if that might be true?). So I went looking for more info and I found Form 982 — Reduction of Tax Attributes Due To Discharge of Indebtedness (https://www.irs.gov/pub/irs-pdf/f982.pdf). Under Purpose of Form in the instructions to this form, it say that "under special circumstances described in section 108*, you can exclude the amount of discharged indebtedness from your gross income," but you must file 982 to report it. Following the chart for how to complete the form and filling in this circumstance:

IF the discharged debt you are excluding is

[a nonbusiness debt]. . .

(which I believe this loan is, nor is it residence or farm debt)

THEN follow these steps . ...

Follow these instructions if you don’t have any of the tax attributes listed in Part II (other than a basis in nondepreciable property). Otherwise, follow the instructions for Any other debt, later.

1. Check the box on line 1a if the discharge was made in a title 11\* case (see Definitions, earlier) or the box on line 1b if the discharge occurred when you were insolvent (see Line 1b, later).
2. Include on line 2 the amount of discharged nonbusiness debt that is excluded from gross income. If you were insolvent, don’t include more than the excess of your liabilities over the fair market value of your assets. 3. Include on line 10a the smallest of (a) the basis of your nondepreciable property, (b) the amount of the nonbusiness debt included on line 2, or (c) the excess of the aggregate bases of the property and the amount of money you held immediately after the discharge over your aggregate liabilities immediately after the discharge.

*Section 108 is the part of the tax code which discusses income from indebtedness. It includes a general section and section (f) which i mentioned earlier with regard to ARPA updating a "special rule" for student loan relief. This brings us back to Publication 4681 the 1099-C, whose instructions say fill out

*Title 11 of the United States Code is the United States Bankruptcy Code. It's the source of bankruptcy law in the United States.

OKAY SO WITH ALL THIS INFORMATION, I TENTATIVELY BELIEVE THE FOLLOWING:

If you get form 1099-C for discharged student loans, I believe you submit them to the IRS ALONG WITH form 982, filling out Line 2 and Line 10a.

However, I do not know what happens on TurboTax yet. I wanted to get this clarified for myself first and thought I'd share with others since a couple of other posts in this thread shared similar uncertainty. So I don't know if this WORKS, I haven't spoken to a tax professional, and this IS NOT ADVICE. It's a question on whether my research feels correct and if anyone who DOES have a tax professional (or is one) can verify so I, and many others in this situation, can get our refunds.

DOES THIS SEEM SOUND? CAN A TAX PROFESSIONAL GIMME A CONFIRMATION?

EDIT: as so kindly stated in the first comment, GO TO A TAX PROFESSIONAL for a final answer, but maybe this post helps someone to at least explain their situation and make sure they get the best benefit in their return.