Set AmeriCorps Funding Free (From Taxation)!

There’s an opportunity right now to make volunteer service at a place like Bread for the City just a little more feasible.

A good chunk of Bread for the City’s staff comes to us through various Volunteer Corps programs, like the AmeriCorps Health Corps or the Lutheran Volunteer Corps. These are mostly young people, recent college grads, working for Bread for the City under a year-long contract.

Currently, nine of these full time volunteers fill important roles at Bread, like Medical Clinic Coordinators, Social Service Case Workers, and the Volunteer Coordinator (that’s me!). Volunteers receive a stipend that is only designed to meet very basic needs. Jesuit Volunteers, for instance, receive $75/month for personal expenses after rent and food costs.

One benefit of performing this year of service is the Segal AmeriCorps Education Award, a $4725 grant from the government to help pay for tuition or student loans (next year it will be $5350). Like Jo has written here before, "this funding is not a primary motivating factor in driving someone to service. It’s the “youthful idealism,” rather than the funding, that makes these slots so competitive." But for those of us with new student loans, or saving up to attend graduate school, it does make a real difference.

The way policy is currently written, however, this grant is taxed as income by at least 15%. Since the Award isn’t given in cash—you can think of it as a type of credit that is exchanged between the government and a loan agency—paying the tax comes out of pocket, not out of the Award. This means that some former Corpsmembers end up paying upwards of $500 after using their award. That’s as much as the recent increase yielded by the Kennedy Service Act, about which we've already posted. Also, if a Volunteer Corps worker enters into a full-time position after a year of service, the Education Award can easily bump them up into a higher tax bracket than their payroll, resulting in an often unforeseen tax burden.

A bill is currently before the House Ways and Means Committee, H.R. 1596, the Segal AmeriCorps Education Awards Tax Relief Act, which would exempt the Award from taxes and give volunteers more opportunity to use their dollars in pursuit of educating and bettering themselves. You can take a few minutes out of your day to help ensure the passage of this bill by letting your representatives know that you support the tax relief of AmeriCorps volunteers and that such relief will help supply our communities with educated, economically stable service-minded individuals. (Of course, if you don’t happen to live in DC, then you can take additional comfort in the knowledge that your representative happens to have a vote in Congress.)