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CanCan a Prisoner receive an income incentive?

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Level 1

can a prisoner who has earned approximately $913, while in prison, receive a credit..  Others say they can be, but they also have also worked  more.  This gentleman has received only $913 on the laundry. 

He also was incarcerated 2018 and 2019.  

Thanks,

jean

 

Jean Anderson
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12 Replies 12
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Level 15
Level 15

I saw something about inmates being eligible for the EIP money....is that what youre asking about?

If you're asking about EIC, the answer is NO, they dont qualify for that.  But they should get the 1200 EIP stimulus money.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 1

Thanks, it is under $900, and he received no 1099.  Does he just do miscellaneous on the Non-Filer?  First one of the prisoners i've done.   Anything else I should do about this? Really appreciate any help!  Thanks!!!

 

Jean Anderson
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Level 15
Level 15
I have no clue how an inmate tax return works, I dont think he can be considered self employed, shouldnt he have received a W2 ?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 1

Yes, it is about the EIP........i just haven't run into this before!

Thanks!  

jean

 

Jean Anderson
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Level 12

A person does not need any income for the $1200 stimulus check (EIP).

It sounds like he does not need to file a tax return, so he can just apply for it himself if he has internet access and an email.

https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

 

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Level 15

@15740 wrote:

Yes, it is about the EIP........i just haven't run into this before!


In the latest twist of events, inmates are apparently entitled to EIP: https://www.forbes.com/sites/shaharziv/2020/10/19/confirmed-inmates-eligible-for-cares-act-1200-stim...

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Still an AllStar
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Level 12

@itonewbie wrote:


In the latest twist of events, inmates are apparently entitled to EIP: 

 

I think it is insane that the IRS said that in the first place.  I just skimmed the court case, but it seems like the IRS's primary argument was that the inmates did not have the 'standing' to bring it to court. 

Very little on whether or not they actually should receive the payment or not.

To me, that is blatant discrimination.

 

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Level 11

You have to argue standing and jurisdiction first -- otherwise those defenses might be considered waived, or the court at least might make you look foolish for not bringing them up before moving on to substance. 

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Level 12

It looks even more foolish when they don't have any defense when standing and jurisdiction are established.  They didn't really have ANY defense for the actual matter at hand..

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Level 15

What prison is s/he in?  SingSing?

(sorry - long day, just couldn't resist)

Former Chump... umm.... AllStar.
If a post answers your question, click on *Accept as solution* for future searches
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Level 15

Sounds like there should be a schedule C. Would owe SE tax, but eligible for EIP. 


ex-AllStar
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Level 11

There are some court cases involving this issue. Also, there may be future legislation that defines whether inmates are eligible for CARES Act payments or payments made under a later round. See

https://procedurallytaxing.com/summary-judgment-victory-for-incarcerated-individuals/

Even if an employer-employee relationship exists, wages paid to prison inmates may not be subject to FICA taxes if the employer is a state or local government entity. The law excepts services performed by prison inmates in the employ of a State, political subdivision, or wholly owned instrumentality thereof from employment for purposes of social security tax. [Section 3121(b)(7)(F) of the Code]. The law also excepts such wages from the Medicare tax. [Section 3121(u)(2)(B)(ii)(II) of the Code].

This exception does not apply, however, if the inmate is performing services in the employ of a nongovernmental entity (for example, a private corporation operating a prison). Thus, whether amounts paid to a prison inmate are subject to FICA depends upon whether an employee-employer relationship exists and whether the inmate is employed by a government or a private employer.

See

https://www.irs.gov/pub/irs-wd/12-0016.pdf