Segal AmeriCorps Educational Award Tax Relief Act of 2026

AmeriCorps members currently earn education awards worth up to $7,395 for a year of national service but face federal tax bills on these awards—roughly $1,600 at a 22% marginal tax rate. This bill would amend the Internal Revenue Code to exclude these awards from gross income for tax purposes, meaning individuals would not have to count them as income when filing taxes. The change would treat AmeriCorps education awards the same way GI Bill benefits already are—excluded from gross income entirely, like scholarships. If recipients use the award to pay down student loans, that debt discharge would also be tax-free. There are no income caps, phase-outs, or complicated formulas—if you earned the award, you keep the full amount. The change would apply to any tax year after the bill becomes law but is not retroactive. The estimated cost is roughly $120 million per year in forgone federal revenue.