Yes. The education award is considered taxable income in the year it is used. For example, if a member uses all or part of the education award for college in the fall of 2012, that member must pay taxes on the portion of the award used when he or she files 2012 taxes.
The Corporation for National and Community Service (CNCS) does not withhold taxes from the award. By the end of January each year, the Corporation sends a 1099 Form to all AmeriCorps members who have made payments from their education awards and for whom interest payments have been made totaling more than $600.00 during the previous year. The 1099 Form does not need to be submitted to the IRS with a member’s tax return, but it reflects the amount that CNCS reports as taxable miscellaneous income to the IRS.