December 13, 2023

Cassidy, Bennet, Bacon, Larson Reintroduce Bipartisan, Bicameral Bill to Provide Tax Relief for AmeriCorps Volunteers

WASHINGTON – U.S. Senators Bill Cassidy, M.D. (R-LA) and Michael Bennet (D-CO) 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. U.S. Representatives John Larson (D-CT-01) and Don Bacon (R-NE-02) also introduced companion legislation in the House of Representatives.

“AmeriCorps members dedicate their time to national service for the betterment of their communities,” said Dr. Cassidy. “The least we can do to honor their service is not stick them with taxes that other Americans don’t pay.”

“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 Senator Bennet. “Congress should recognize their commitment and help them further their education without an unnecessary burden. I’m grateful to work with my colleagues to ensure the education assistance they earn is not unfairly taxed.”

“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 Representative 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 Representative Bacon. “We don’t make Pell Grant recipients pay taxes on their grants and neither should these individuals.”

“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 Cassidy and Bennet for leading the effort to make the award tax free and urge their colleagues to support the bill,” said AnnMaura Connolly, President of Voices for National Service.

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.

This legislation is supported by 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 Cassidy, Bennet, Larson, and Bacon, U.S. Senators Susan Collins (R-ME), Chris Coons (D-DE), Catherine Cortez Masto (D-NV), and Roger Wicker (R-MS) co-sponsored the legislation.