This week, congressional champions in the House of Representatives and the Senate introduced H.R. 6759/S.3487, the Segal AmeriCorps Education Award Tax Relief Act. This bipartisan, bicameral bill seeks to make the AmeriCorps education award exempt from federal taxation. Senators Michael Bennet (D-CO) and Bill Cassidy (R-LA) led reintroduction in the U.S. Senate, and Representatives Don Bacon (R-NE) and John Larson (D-CT) are the original sponsors in the House. Senators Susan Collins (R-ME), Chris Coons (D-DE), Catherine Cortez Masto (D-NV), and Roger Wicker (R-MS) are cosponsoring the legislation.
AmeriCorps was designed to provide educational and economic opportunities for those who serve their communities, and the Segal AmeriCorps Education Award – received upon completion of service – is a major benefit to support the educational and career development of alumni. This award, equal to the maximum Pell Grant (for full time service) in the year service was completed, can be used for current expenses related to education or to repay qualified student loans. More than $4.8 billion in education awards have been earned by AmeriCorps members over the last 30 years, making higher education 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 on those who choose to serve with AmeriCorps. Taxing the AmeriCorps education award causes financial stress for corps members, forcing them to delay and abandon educational plans or take out credit cards to pay their tax bill, since no part of the award can be used for taxes. 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 100 endorsing organizations; the full list can be found here.
- Sen. Bennet’s press release on the Segal AmeriCorps Education Award Tax Relief Act
- Bill summary
- Bill text