Washington, D.C. – Today, U.S. Senators Michael Bennet (D-Colo.) and Bill Cassidy, M.D. (R-La.) and U.S. Representatives John B. Larson (D-Conn.) and Don Bacon (R-Neb.) introduced the Segal AmeriCorps Education Award Tax Relief Act.
Thousands of Americans serve their country through national service opportunities. In exchange for their service, they can take the Segal AmeriCorps Education Award to make higher education more affordable and accessible. The value of the Education Award is linked to the maximum amount of a federal Pell Grant for the year in which the AmeriCorps member served ($6,495 in 2021). Currently, these benefits are treated as taxable income, and none of it can be withheld to pay the resulting taxes. The Segal AmeriCorps Education Award Tax Relief Act would fix this by excluding the Education Award from taxable gross income.
"AmeriCorps members make critical contributions to our communities in Colorado and across the country, working countless hours of service to improve the lives of our kids and neighbors," said Bennet. "It’s past time we recognize their commitment. By eliminating this unnecessary burden on AmeriCorps members, we can ensure they receive the full award they deserve to help pay for higher education."
“AmeriCorps members dedicate their time and talents to serve their communities and country. Sticking them with taxes that other Americans don’t pay is unfair,” said Cassidy.
“Each year, thousands of Americans selflessly serve our communities. In exchange for their service, they receive the Segal Education Award to help make higher education more affordable. The Segal AmeriCorps Education Award Tax Relief Act will make this award more accessible, by excluding it from taxable gross income. Currently, this award is treated as taxable income, creating a financial burden for AmeriCorps alumni. As a nation, we should be encouraging more people to serve our country, not making it harder. I’m honored to continue the late-Rep. John Lewis’s work on this issue and am proud to introduce this bipartisan, commonsense legislation with Rep. Bacon and Senators Bennet and Cassidy today,” said Larson.
“Many young Americans across the country serve their communities through national service opportunities and although they are thanked with an education award, they are slapped because it is treated as taxable income,” said Bacon. “This Act will remove that financial burden for these young leaders who make an impact through their critical work.”
“The tax on the AmeriCorps education award creates an unexpected and unfair tax burden on the dedicated Americans who commit to serving their country through AmeriCorps. It’s essentially a tax on service,” said AnnMaura Connolly, President of Voices for National Service. “We don't tax Pell Grants or GI Bill Benefits, and we shouldn’t tax the Segal AmeriCorps Education Award. We’re grateful to Senators Bennet and Cassidy and Representatives Larson and Bacon for leading the effort to make the award tax free and urge their colleagues to support the bill.”
The bill text is available HERE. A list of endorsing groups is available HERE. Background on the bill is available HERE.