On March 9th – the start of AmeriCorps Week – Representatives Don Bacon (R-NE) and John Larson (D-CT) reintroduced H.R. 7878, the Segal AmeriCorps Education Award Tax Relief Act. This bipartisan bill seeks to make the AmeriCorps Education Award exempt from federal taxation.
AmeriCorps was designed to provide educational and economic opportunities for those who serve their communities, and the AmeriCorps Education Award – received upon completion of service – is the key benefit to support alumni’s educational and career development. Equal to the maximum Pell Grant for a full-time term of service, the AmeriCorps Education Award can be used to pay for educational expenses, including trade school, or to repay qualified student loans. Over the last three decades, AmeriCorps members have earned more than $4.8 billion in education awards, making higher education and workforce development opportunities more affordable and accessible for many Americans.
However, unlike other fellowships, scholarships, and educational award programs with a similar purpose – such as the Pell Grant or GI Bill Benefit – the AmeriCorps Education Award is treated as taxable income, causing an unexpected and unfair financial burden in the year the award is used. Taxing the AmeriCorps Education Award causes financial stress for alumni which may force them to delay and abandon educational plans or take out credit cards to pay their tax bill. For low-income youth, the tax on the award makes AmeriCorps service a less viable option. The Segal AmeriCorps Education Award Tax Relief Act would fix this by excluding the education award from taxable gross income, removing a barrier to education and service for young people.
The Segal AmeriCorps Education Award Tax Relief Act is supported by more than 64 organizations; the full list can be found here.
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