When President Trump signed the CARES Act last spring, part of the legislation featured $1,200 stimulus payments to citizens who make less than $75,000 per year. As we all know, a second round of checks for $600 was included in the most recent stimulus bill. And, it looks like President Biden will be signing more legislation in the near future for a third round of stimulus payments, if Congress passes anything resembling his $1.9 trillion plan.
This money is being given out to people who need financial help during the pandemic. But, does that include people who are incarcerated? Can prison inmates get stimulus checks?
In today’s blog post, I will cover the following topics:
- The IRS was ordered to give prison inmates a chance to claim a stimulus payment
- Getting a stimulus payment for a prison inmate has been difficult
- Can people who are still incarcerated get a stimulus check?
- Will inmates get a second stimulus check?
- Who is eligible for the Recovery Rebate Credit?
- How to calculate the Recovery Rebate Credit for your inmate
The IRS was ordered to give prison inmates a chance to claim a stimulus payment
When the first stimulus payment was sent out last spring, the courts ordered the IRS to give people in prison and jail the chance to claim the $1,200 payment after a lawsuit was filed against them.
However, that process took a few months, and in the meantime there was a lot of confusion about whether or not inmates qualified for the payments. The deadlines to make a claim came and went. The deadline to file the physical paperwork for a stimulus check claim was November 4, 2020. The deadline to file an online claim was November 21, 2020.
Since prison and jail inmates don’t have access to the internet – and because many prison officials didn’t give their inmates the chance to file the physical paperwork – many prison inmates missed out on these payments.
Getting a stimulus payment for a prison inmate has been difficult
Those November deadlines emerged in late October, which made it difficult for most prison inmates to get their stimulus check. As CNET notes, the deadlines also emerged after the IRS gave out confusing and often contradictory guidance. At first, the IRS sent money to some people in jail and prison and then asked for it back!
It wasn’t until a federal judge in California responded to a class-action lawsuit that the IRS started sending out forms to prisons across the country so the 2.3 million people who are incarcerated could attempt to get their check.
The IRS appealed the judge’s decision and requested an injunction to the ruling. But, according to the IRS website, they “cannot deny a payment to someone who is incarcerated if they meet the criteria.”
Despite this fact, there have been reports of facilities actively blocking the forms and newsletters about the payments from getting to inmates. There have also been reports of people fraudulently getting payments in the name of people who are incarcerated.
Can people who are still incarcerated get a stimulus check?
This is a difficult question to answer. Since those November deadlines have come and gone, there is no longer a place on the IRS website for non-filers to enter their payment info. For prison inmates who did file a 2019 tax return, the deadlines have still passed. But there is hope. Inmates can obtain their money, but it will take some time.
Will inmates get a second stimulus check?
When it comes to the $600 payment and the $1,200 payment that have already been sent out, there is a way for you to help your incarcerated loved one get those stimulus checks.
What you will have to do is file a 2020 Tax Return for your inmate. You can report zero earnings (if they didn’t earn any money last year) and file for the “recovery rebate” tax credit. The way the law is written, both the first $1,200 payment and the second $600 payment were simply advance payments of this credit.
If the combined total of those two stimulus amounts is less than the recovery rebate credit amount, they may be able to get the difference back in the form of a tax refund.
Who is eligible for the Recovery Rebate Credit?
According to MSN.com, the eligibility rules for the recovery rebate credit are essentially the same as the rules for receiving the first and second stimulus checks.
The big difference is that eligibility for the stimulus checks was based on the information from the 2018 and 2019 tax returns. The eligibility for the recovery rebate credit is based on information from the 2020 tax return.
Generally, you’re eligible to claim the recovery rebate credit if, in 2020, you:
- Were a U.S. citizen or U.S. resident alien;
- Can’t be claimed as a dependent on another person’s tax return; and
- Have a Social Security number valid for employment that’s issued before the due date of your 2020 tax return (including extensions)
How to calculate the Recovery Rebate Credit for your inmate
Calculating the recovery rebate credit is the same as the calculation of stimulus checks. It starts with a base amount, and for most people that is $1,800. That number comes from combining the two checks $1,200 plus $600.
If the inmate is the head of a household, pays child support, or is married filing jointly – basically, if the inmate is not single with no dependents – then these numbers will change. Please refer to the IRS website for more information in this situation, or try out this MSN article that will go into more detail about inmates with spouses and dependents.
After adding up the base amount, then it’s time to determine if the recovery rebate credit is reduced because of income. Obviously, an inmate who was incarcerated throughout 2020 is not going to have any income. This means that the credit will not be reduced.
You will report the $1,800 rebate amount on Line 30 of your inmate’s 2020 federal income tax return. Because this is a “refundable” credit, they will get this amount since they have no other taxes to pay.
Remember, your inmate will be getting a paper check unless they have a bank account and you have that info for direct deposit. Do not have the check sent to the inmate at the prison because most facilities do not accept direct payments to inmates.
Instead, you will have to deposit the check into the inmate’s account through whatever method the facility uses. Most prisons use JPay for inmate accounts.
If your inmate hasn’t received their stimulus checks, there is still hope. However, you will have to help them out. Your inmate can get their money through a tax refund, but you will have to fill out these forms for your inmate. You can also send the 2020 tax filing forms to your inmate with instructions on how to fill it out.
We are not tax professionals or attorneys. While all of this is sound advice, we do advise that you consult with a tax professional if you have any questions about your inmate filing for this credit.
Has your incarcerated loved one received their stimulus checks? Let us know in the comments below.
Sources: Confirmed: Inmates Eligible For Cares Act $1,200 Stimulus Checks From IRS; Here’s How To File People who are in prison can get a stimulus check, but there's a catch. What to know today Stimulus, round 2: Incarcerated people will be eligible for new round of payments The Recovery Rebate Credit: Get Your Full Stimulus Check Payment with This Tax Credit