Washington, D.C. — U.S. Senators Michael Bennet (D-Colo.) and Bill Cassidy (R-La.) alongside U.S. Representatives John Larson (D-Conn.) and Don Bacon (R-Neb.) reintroduced the Segal AmeriCorps Education Award Tax Relief Act. This legislation would provide tax relief for AmeriCorps members who earn Segal Education Awards to help pay for higher education costs that they earn through their service.
"In Colorado and across the country, AmeriCorps volunteers contribute to our communities and help improve the lives of our kids and neighbors through countless hours of service," said Bennet. "Congress should recognize their commitment and help them further their education without this unnecessary burden. I’m grateful to work with my colleagues to ensure the education assistance they earn is not unfairly taxed."
“AmeriCorps members dedicate their time to national service for the betterment of their communities,” said Cassidy. “The least we can do to honor their service is not stick them with taxes that other Americans don’t pay.”
“Service to our communities should be rewarded, not penalized. Currently, individuals who participate in AmeriCorps find that the educational benefit they’ve received upon completion of the program is reduced or made completely inaccessible due to federal taxation. The Segal AmeriCorps Education Award Tax Relief Act will correct this policy and ensure that we are supporting AmeriCorps alumni and encouraging National Service. I am honored to introduce this legislation championed by my friend, the late-Rep. John Lewis with Rep. Bacon and Senators Bennet and Cassidy,” said Larson.
“These dedicated Americans shouldn’t have to pay taxes on a benefit they receive while in turn, providing valuable services for our country,” said Bacon. “We don’t make Pell Grant recipients pay taxes on their grants and neither should these individuals.”
“Many AmeriCorps members in Nevada are first-generation students who provide critical services to our communities, and they shouldn’t be overburdened with taxes on their hard-earned education awards,” said U.S. Senator Catherine Cortez Masto (D-Nev.). “Our bipartisan bill will eliminate the unfair tax on their service so they can afford to complete their education, and I’ll keep working to support students in Nevada.”
AmeriCorps members who complete a full term of service earn a Segal Education Award equal to the maximum Pell Grant amount ($7,395 for 2023-2024). AmeriCorps members can use the award to pay college costs or to pay down student loan debt. Since the program launched in 1994, nearly one million AmeriCorps members have earned Segal Education Awards.
Currently, Segal Education Awards are considered taxable income. This legislation would exclude these awards from income tax, to reflect the intent of federal education awards, help those serving pay for college, and remove a barrier that may discourage young people from taking advantage of the financial assistance they’ve earned.
“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. 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 Bacon and Larson for leading the effort to make the award tax free and urge their colleagues to support the bill,” said AnnMaura Connolly, President, Voices for National Service.
This legislation is supported by nearly 100 organizations, including City Year, Downtown Colorado, Habitat for Humanity, National Alliance for Public Charter Schools, National Council of Nonprofits, Service Year Alliance, Teach for America, Voices for National Service, and the YMCA of USA.
In addition to Bennet, Cassidy, Larson and Bacon, this legislation is cosponsored by U.S. Senators Susan Collins (R-Maine), Chris Coons (D-Del.), Catherine Cortez Masto (D-Nev.), and Roger Wicker (R-Miss.).
The text of the bill is available HERE. A summary of the bill is available HERE.
