AmeriCorps Segal Education Award Payments- Tax Free in Iowa!
According to Iowa Code 701—40.74(422), AmeriCorps Segal Education award payments are not taxed as individual state income in Iowa. This can make a big difference in the amount of taxes owed, so be sure to highlight this when working with your tax preparer. To document AmeriCorps Segal Education Award payment as an adjustment, or tax deduction, on your individual Iowa State Income Tax form, please see the directions below. Remember, however, that any Segal Education Award payment is still taxable as federal income in the year it is redeemed. Many AmeriCorps members qualify for free tax preparation assistance from trained volunteers at Volunteer Income Tax Assistance (VITA); your local community action agency or United Way can often help you identify the nearest VITA site.
Tax year 2010 was the first time that AmeriCorps members and alums could take advantage of the exclusion of education award payments from their Iowa income taxes. These instructions reference 2018 tax forms, specifically the IA 1040 Iowa Individual Income Tax Form (see excerpt below). We expect the process to be similar in future years.
- Step 5, Gross Income: Your Segal AmeriCorps Education Award payment was included in your federal taxable income, so it will be included in your Iowa taxable income in Step 5.
- Step 6, Adjustments to Income: You must enter the amount of your Segal AmeriCorps Education Award payments (including interest) on LINE 24 “Other Adjustments.” This will result in these payments being deducted from your taxable income.
- Complete the remainder of the tax form as instructed.
For more information about Individual Income Taxes in Iowa, visit the website of the Iowa Department of Revenue.
This form last updated December 2019. Please note that Volunteer Iowa is not an official tax preparer nor is the information contained here considered to be official tax advice.