Sponsors (2)
This bill provides targeted tax relief for AmeriCorps educational awards—raising net benefit for participants and preventing tax on related loan discharges—while causing a modest reduction in federal revenue and some potential confusion about the scope of tax relief.
AmeriCorps participants and student borrowers who use AmeriCorps national service educational awards: those awards—and any student-loan discharge resulting from using them—are excluded from federal taxable income, increasing recipients' net benefit and preventing tax bills when debt is forgiven.
Federal taxpayers/federal budget: excluding these awards from taxable income modestly reduces the federal tax base and could slightly decrease federal receipts, creating small additional budgetary pressure.
AmeriCorps participants and other student loan borrowers: the change applies only to AmeriCorps national service educational awards (not to other forms of student loan forgiveness), which may cause confusion or incorrect expectations about tax treatment of other loan discharges.
Based on analysis of 2 sections of legislative text.
Makes AmeriCorps national service educational awards and loan discharges paid with those awards non-taxable for federal income tax purposes.
Official title: To amend the Internal Revenue Code of 1986 to provide an exclusion from gross income for AmeriCorps educational awards.
Introduced March 9, 2026 by John B. Larson · Last progress March 9, 2026
Excludes AmeriCorps national service educational awards from federal gross income and treats loan discharges paid with those awards as non-taxable discharge-of-indebtedness income. The change amends the Internal Revenue Code so award amounts and related loan discharges received in taxable years ending after enactment are not counted as taxable income.