# Plain Language Summary: Segal AmeriCorps Education Award Tax Relief Act of 2021

Right now, when AmeriCorps volunteers finish their service and receive an educational award to pay for college or pay back student loans, the government treats that money as taxable income. This means volunteers have to pay federal income taxes on their awards, which reduces the actual benefit they receive. This bill would change that by making AmeriCorps educational awards tax-free, so volunteers keep the full amount they've earned.

The practical impact is straightforward: AmeriCorps volunteers would no longer owe federal income taxes on their education awards. If a volunteer receives a $6,000 award, they'd get to use the full $6,000 for school or student loan repayment instead of having to set aside a portion for taxes. The bill also covers situations where volunteers use their awards to pay down existing student loan debt—that money would also be excluded from taxable income. This makes the AmeriCorps program more valuable as a way to help young people afford education or manage student debt without the tax penalty they currently face.

The change would apply to anyone who completes AmeriCorps service after the bill becomes law. It's particularly meaningful for lower-income volunteers for whom the tax bill on their award represents a significant financial burden. Essentially, the bill recognizes that AmeriCorps awards are compensation for public service and shouldn't be taxed like regular income, making the program a more attractive option for people considering national service.

Segal AmeriCorps Education Award Tax Relief Act of 2021

Larson, John B.

Segal AmeriCorps Education Award Tax Relief Act of 2021 This bill modifies the requirements for calculating taxable income to exclude from gross income any AmeriCorps educational awards provided under the National and Community Service Act of 1990.