(INDIANAPOLIS) – Like many other states, Indiana will be taxing student debt relief as income.

This comes on the heals of President Joe Biden’s administration announcing a forgiveness plan in August.

The Indiana Department of Revenue says that Indiana residents are going to be required to list their forgiven loans as taxable income per state law.

Estimates says more than 40 million Americans could see their student loan debt cut or eliminated under President Biden's plan, which will erase $10,000 in federal student loan debt for individuals with incomes below $125,000 a year, or households that earn less than $250,000. Federal Pell Grant recipients could receive an additional $10,000 in federal forgiveness under the plan.

Depending on the state's tax rates, the taxpayer's other income, and the deductions and exemptions they're able to claim, residents could owe up to several hundred additional tax dollars on the forgiven loans.

Indiana's tax rate is 3.23%, which means those who are eligible to receive $10,000 in federal loan forgiveness will pay up to $323 in taxes. Pell Grant recipients could owe around $646.

Residents must also pay additional county taxes on the forgiven loans.

Indiana House Speaker Todd Huston said in a statement Tuesday he was aware of the State's policy and would "expect for conversations to continue as lawmakers head into the next legislative session," which begins January 2023.