asked

I am a physician in Michigan who received a recruitment loan from a hospital during my medical school years, with a promissory note requiring me to work for them for a certain number of years after graduation. The hospital did not tax the loan at the time, but now, after I have worked there for over a year, they are treating the loan as income, adding it to my paycheck, and taxing me at my current high tax bracket. They are also charging me interest on the loan, which they are adding to the principal, and then taxing that total amount. I believe this should be treated as a bonus and taxed at 25%, not my current tax bracket. Is this legal, and what should I do?

January 15th, 2023

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