Background on the Segal AmeriCorps Education Award Tax Relief Act:
More than 30 years ago, AmeriCorps was designed to provide a pathway to economic and educational opportunity for those who serve the nation and their communities. Every AmeriCorps member who completes a term of service receives an education award that may be used to pursue a future credential or degree, or to pay off existing, qualified student loans. The value of the AmeriCorps Education Award is linked to the maximum amount of a federal Pell Grant for the year in which the AmeriCorps member served.
The AmeriCorps Education Award is treated differently than other fellowships, scholarships and educational award programs designed with a similar purpose, including Pell Grants, the GI Bill Benefit, and the National Health Service Corps. The AmeriCorps Education Award is subject to federal taxation after it is used.
AmeriCorps alumni are not permitted to use a portion of the AmeriCorps Education Award to cover any resulting taxes. The AmeriCorps Education Award is held in a Trust, and once claimed, is paid directly to the institution of higher education or the student loan lender. The financial hardship created by the tax discourages use of the AmeriCorps Education Award and delays educational plans for those who have served their nation and communities. For low-income youth, the tax on the award makes AmeriCorps service a less viable option.
What is Happening:
The sponsors of the AmeriCorps Education Award Tax Relief Act are working towards reintroduction in the House and Senate. In the 117th Congress, the original bill sponsors were Sen. Michael Bennet (D-CO), Sen. Bill Cassidy (R-LA), Rep. Don Bacon (R-NE), and Rep. John Larson (D-CT).
The sponsors do not plan on making any changes to the legislative text. The tax relief bills will look just like S. 2075 and H.R. 3941 that were introduced in the last legislative session.
How You Can Help:
Last session, 114 organizations expressed support for the AmeriCorps Education Award Tax Relief Act. Voices for National Service is inviting more organizations to endorse this legislative change. If your organization is willing to be listed as supporting this legislation — please fill out the web form below.
To review the updated list of supporting organizations, click here. If you wish to remove your organization from this list, please email Shanelle Oliver at soliver2@cityyear.org.
If you have further questions regarding the AmeriCorps Tax Relief Act, or would like more information, please email Shanelle Oliver at soliver2@cityyear.org.