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The Basics Behind Taxation of the Education Award
So why is the Segal AmeriCorps Education Award subject to federal taxation?  As part of a compromise in the negotiations during the crafting of the legislation that created AmeriCorps in the early 1990s, it was agreed by the original authors and architects, that the Ed Award would be subject to federal taxation.  Unfortunately that decision would have a significant negative impact on members and alumni alike for years to come.  The impact of the decision is often not fully realized by alumni until it is time to file their annual tax returns.
 
Unlike job-based income where taxes are deducted regularly from each paycheck, taxes on the Ed Award are due in a single lump-sum payment.  This can become a significant financial burden, especially when the tax obligation stretches into the high hundreds or even thousands of dollars. AmeriCorps alumni often find themselves in difficult financial situations when it comes time to pay this tax; many are struggling to pay college costs and have little (if any) savings because they just spent a year living at the poverty level, making personal sacrifice while serving their country.

 

AmeriCorps Alums believes the financial burden facing AmeriCorps alumni is one that can be eliminated.  This will require a coordinated grassroots effort that includes the active involvement of AmeriCorps alumni all across the country. Eliminating taxation on the Segal Education Award will send a strong message that our elected officials support AmeriCorps and the 500,000+ alumni who have served this nation so selflessly.
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