# Segal AmeriCorps Education Award Tax Relief Act of 2021

This bill addresses a tax problem for people who serve in AmeriCorps, a national service program where volunteers work on community projects in exchange for education benefits. When AmeriCorps members complete their service, they receive an education award—money they can use to pay for college or pay back student loans. The problem is that the federal government currently treats these education awards as taxable income, meaning recipients have to pay income taxes on money they're supposed to use for education.

Here's what that means in practice: If someone completes an AmeriCorps term and receives a $6,000 education award, they might owe taxes on that $6,000 even though they haven't actually received cash in hand. This creates a financial burden for service members who are already typically earning very little during their AmeriCorps year. The bill fixes this by making AmeriCorps education awards tax-free, similar to how other education assistance programs work. This means service members won't have to pay federal income taxes on their education awards, making the benefit actually usable for its intended purpose—paying for education.

The practical effect is straightforward: AmeriCorps volunteers would keep their full education award without losing a portion to taxes. For someone receiving a $6,000 award, this could mean an extra $1,000 or more staying in their pocket, depending on their tax bracket. This change particularly helps lower-income service members and makes the AmeriCorps program more attractive by increasing the real value of what participants receive for their service.

Segal AmeriCorps Education Award Tax Relief Act of 2021

Bennet, Michael F.

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.