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:
Senator Michael Bennet (D-CO) and Representatives John Larson (D-CT) and Don Bacon (R-NE) are working together to reintroduce the AmeriCorps Tax Relief Act in the House and Senate. The sponsors are not making any changes to the legislative text. The tax relief bills will look just like S. 1355 and H.R. 1794 — that were introduced in the 116th session.
How You Can Help:
The sponsors have asked Voices for National Service to compile a list of organizations who support the AmeriCorps Tax Relief Act, a bill to exclude the AmeriCorps Education Award from federal income tax. If your organization is willing to be listed as supporting this legislation — please fill out the web form below.
If you have further questions regarding the AmeriCorps Tax Relief Act, or would like more information, please email Shanelle Oliver at firstname.lastname@example.org.
We are also collecting stories from AmeriCorps Alumni on how they have been impacted by the tax on the education award. To share your story, click here.