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Advocates ask Massachusetts to exempt Segal AmeriCorps education award from state income tax
Summary
The Massachusetts Service Alliance and other advocates told the Joint Committee on Revenue that taxing the Segal AmeriCorps education award creates a financial barrier for service members and that excluding the award would cost the state only about $200,000 annually while aiding recruitment.
Advocates for national service urged the Joint Committee on Revenue to report favorably on legislation that would exempt the Segal AmeriCorps Education Award from Massachusetts taxable income. Beth McGinnis, chief executive officer of the Massachusetts Service Alliance, said the program supports AmeriCorps members who receive modest stipends while serving and a Segal AmeriCorps Education Award upon completion.
McGinnis told the committee the full-time award for the 2025–26 program year is $7,395 and said Massachusetts currently treats the award as taxable income even though the funds are paid to loan servicers or educational institutions rather than deposited directly into members’ accounts. She said that treatment creates an undue tax burden and a disincentive for prospective members who may lack disposable income to pay taxes when they redeem the award.
Witnesses estimated nearly 600 AmeriCorps members in Massachusetts would be affected; McGinnis estimated about $4 million in awards among those members, which would generate roughly $200,000 in state revenue if taxed. She and other panelists argued the modest fiscal trade-off would improve recruitment and retention and asked the committee to act on Senate Bill 1963 and House Bill 3010. Committee members thanked the witnesses and did not record substantive questions during the hearing.
