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AmeriCorps hurricane heroes deserve a reward — don’t tax it

AmeriCorps
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AmeriCorps

As hurricanes ripped through Texas, Florida and Puerto Rico, we were moved by the stories of dedicated citizens who stepped up to help these communities respond and recover.

From the neighbors who helped a woman in labor escape her flooding apartment to the journalist who saved a truck driver from his flooding cab and the “Cajun Navy” who drove their pickup trucks and boats towards Houston during the storm to help search and rescue crews and first responders — the heroism and selflessness of everyday people inspire us.

{mosads}These stories define the American spirit in times of crisis. But when the cameras leave and these communities are no longer in the headlines, Texas, Florida and Puerto Rico will still need help. They’ll be rebuilding for years to come.

 

That’s where national service comes in.

Over 800 AmeriCorps members are on the ground right now in Texas and hundreds more are in Florida, responding to Hurricanes Harvey and Irma. They are mucking out flooded homes, removing moldy drywall and helping to organize the thousands of volunteers who have traveled from near and far to help rebuild these devastated communities.

More teams of AmeriCorps members sheltered in place in Puerto Rico, as the latest storm passed so they could continue supporting the cities and towns ravaged by Hurricane Irma and now Hurricane Maria. These young people helped the Gulf States rebuild after Katrina and they will to do the same for Texas and Florida and Puerto Rico.

AmeriCorps members have chosen to spend a year — and sometimes more — of their lives giving back to their community and their country. In return for their service, these motivated young Americans receive a poverty-level stipend, and at the end of their year, they will be eligible to receive a Segal AmeriCorps Education Award, equal to the amount of the maximum Pell Grant, to use towards college costs or to pay down their student loan debt. 

While this much-needed benefit, worth about $5,900, is greatly valued by today’s students who are drowning in student debt, many of these young people will think twice about using it.

Why? This education award is treated as taxable income, not subject to withholding, and cannot be converted to cash to pay the taxes.  As a result, when AmeriCorps alums go to use their education award to help pay for school or pay off student loans, they’re often faced with large bills at tax time.

Most AmeriCorps alums are in school or working in public service careers, often as teachers, youth workers or nonprofit staff after serving.  Their financial circumstances make unexpected bills challenging. A survey of AmeriCorps alums found that in 2010, two-thirds of alums were earning less than $40,000 a year.

The young people who are in Houston wearing full body protective gear to gut homes in 95-degree heat, are going above and beyond their call of duty as citizens. They will be rewarded with a burdensome tax to their already modest award. In contrast, Pell Grants, scholarships and fellowships, are not taxable if used for “qualified education expenses” — tuition, books or required fees.

Congress should eliminate the unfair tax treatment of AmeriCorps education awards.  Legislation to right this wrong is already in the works. Sens. Michael Bennet (D-Colo.) and Johnny Isakson (R-Ga.) have co-sponsored The Segal AmeriCorps Education Award Enhancement Act in the Senate and  Rep. John Lewis (D-Ga.) has introduced The Segal AmeriCorps Education Award Tax Relief Act of 2017 in House.

It’s time for Congress to take action and pass this bipartisan legislation. This is not only the right thing to do for the people who are serving our country when we need it most, but by removing this barrier and excluding the Segal AmeriCorps Education Award from gross annual income, Congress will be encouraging the next generation to serve with AmeriCorps.

We’ve seen the power of national service in action. We know AmeriCorps members are critical to keeping our country strong, especially in the wake of natural disasters. We should be removing obstacles for young people to serve. Let’s do away with outdated laws and unnecessary barriers, and support the next generation as they serve our country and continue to advance their educations and careers.

Shirley Sagawa is the CEO of Service Year Alliance, an organization dedicated to making a year of service a common expectation and opportunity for all young Americans as a way to tackle important challenges while transforming their own lives.

Tags AmeriCorps Hurricane Harvey Hurricane Irma Hurricane Maria Johnny Isakson Michael Bennet

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