AmeriCorps Education Award, Taxes and Tax Credits Questions and Answers
Basic Tax Form Questions:
What is a W-2? Your W-2 will include the taxable portions of your living allowance, but it will not include any
payments from your education award. Education award payments will be included in an IRS form 1099.
What is a 1099? AmeriCorps members are required to pay federal and local income taxes on any portion of the
education award or interest payment made on their behalf. The 1099 is the IRS form that reports to you the total
of these payments. The 1099 includes all payments that were sent to the school or lending institution before the
end of the calendar year. This form is usually mailed out in late January.
Looking for your W-2? Unless you were an AmeriCorps*VISTA or NCCC member, your W-2 for your time as
an AmeriCorps member in 2000 will come from the program where you served. VISTA and NCCC members will
receive their W-2 from the Corporation for National Service. It is important to keep your address at the National
Service Trust up-to-date. Send address updates to email@example.com or call 1-888-507-5962.
Tax Credit Questions:
The following questions and answers are intended to introduce AmeriCorps members to the new provisions (or
guidelines) regarding tax credits. For individual guidance, you should contact a tax professional or the Internal
Does this mean that my education award is not taxable? Not exactly. While the education award is still
considered taxable income, you may—depending on how you use your education award—reduce your Federal
taxes by claiming an education credit or by deducting student loan interest payments from your taxable income.
I plan to use a portion of my education award to repay student loans and the balance to pay for college.
Can I take advantage of both the education credit and the student loan interest deduction in the same
Should I be thinking about these education tax credits and student loan interest deductions when I
decide how and when to use my education award? Absolutely. You may be able to increase your tax savings
significantly by tailoring your use of the education award to the rules of each tax benefit. To find out the best
options for your situation, consult a tax professional or the Internal Revenue Service.
Why can't I file the Form 1040EZ and still reduce my Federal taxes? The 1040EZ is not designed for
education credits or the student loan interest deduction. To claim an education credit or to deduct student loan
interest payments, you must file either the Form 1040A or Form 1040.
Is it worth the extra time to file the Form 1040A or Form 1040? While each person's situation is different,
claiming an education credit or deducting student loan interest payments could save you up to hundreds of
My head is spinning. How can I get some more help figuring out how to save on my Federal taxes?
Unfortunately, the National Service Trust is not able to give individual guidance. While there is no substitute for a
tax professional, you can start learning the basics by contacting the Internal Revenue Service in any of the
The IRS TELETAX (1-800-829-4477) has recorded information on the new education credits (Topic #605)
and student loan interest deduction (Topic #456).
To order free publications and forms, call 1-800-TAX-FORM (1-800-829-3676). You can start with Publication
910, Guide to Free Tax Services. Publication 970, Tax Benefits for Higher Education, provides step by step
assistance to those seeking to benefit from the education tax credits or interest deduction..
The IRS has compiled a list of frequently asked questions about the education credits and student loan
interest deduction at sections 1 and 2 at: www.irs.ustreas.gov/prod/hot/not97-60.html.
The IRS's phone number is 1-800-829-1040.
The U.S. Department of Education's web site has helpful information at www.ed.gov/inits/hope.
The AmeriCorps Alum web site has helpful information about education credits that affect AmeriCorps
members at www.americorpsalum.org/edtax.html.