Incarcerated can get stimulus checks
WASHINGTON – At first, the IRS said inmates were eligible for stimulus payments up to $1,200.
Then the agency walked back that decision, telling correctional facilities to intercept stimulus checks that the agency had already issued. Spouses of the inmates were told they had to return the part of relief money intended for incarcerated individuals.
The Coronavirus Aid, Relief, and Economic Security (Cares) Act provides economic impact payments or stimulus payments of up to $1,200 for individuals and $2,400 for taxpayers filing a joint tax return. There was nothing in the law prohibiting prisoners from receiving stimulus payments.
Aclass-action lawsuit was filed on behalf of inmates in local, state and federal facilities, arguing that the IRS actions were unlawful. Judge Phyllis Hamilton of the U.S. District Court for the Northern District of California agreed, saying the decision to withhold the stimulus payments was “arbitrary and capricious.” Hamilton ordered the Treasury Department and the IRS to send the relief money and to do so within certain deadlines.
Still not chastened, the Trump administration appealed. Last week, Hamilton again smacked away efforts by the government to stop the distribution of the payments, entering a final summary judgment. And the judge is making the IRS give inmates additional time to claim their stimulus money, moving an initial
Oct. 30 deadline to Nov. 4.
The judge also ordered that the IRS send out a notice that correctional facilities officials should give to prisoners about the court’s decision. The agency would also need to mail blank 1040 forms for inmates and instructions on how to fill out the paper return to ensure that every eligible person in each facility has a packet in time to file a claim, said Kelly Dermody, a partner with San Franciscobased Lieff Cabraser Heimann & Bernstein, one of the law firms representing the plaintiffs and class-action members.
The plaintiffs are also represented by the nonprofit Equal Justice Society, which advocates against inequities in the criminal justice system.
“Hopefully this is the last of it,” Dermody said. “They have already wasted a lot of taxpayer money chasing after checks that were previously properly issued, misleading correctional authorities about eligibility, and filing brief after brief in court trying to stop our fellow Americans from getting stimulus money.”
Inmates who filed a 2018 or 2019 tax return, received Social Security benefits or Railroad Retirement benefits in 2019, or previously registered with the IRS through the non-filers portal should get an automatic payment in the mail or by direct deposit.
Because incarcerated individuals are generally not allowed access to a computer, they will have to fill out and postmark a simplified Form 1040 federal return by Nov. 4.
For those capable of going online, there’s more time to claim a stimulus payment. The deadline to use the agency’s online non-filers tool at irs.gov is Nov. 21.
The economic impact payment is an advance credit for 2020. Under the Cares Act, payments must be made by Dec. 31. If people don’t receive a payment by then, they won’t receive their stimulus funds until they file a 2020 federal return next year. By Nov. 9, the government has to confirm the number and amount of stimulus payments distributed as a result of the court order.
As a result of the class-action lawsuit, the IRS is required to reconsider any claim for a stimulus payment that was previously denied. The court order directs the IRS to automatically reprocess stimulus claims by Oct. 24. If you’ve already used the non-filers tool, you should automatically get a stimulus payment.
If you are in the group whose payment is being reprocessed, that doesn’t mean the check will arrive by Oct. 24; it may be delivered many weeks later, Dermody said. However, after the Oct. 24 deadline, go to irs.gov and use the “Get My Payment” tool to ensure a payment has been scheduled.
Unfortunately, you won’t find a lot of information on the IRS website. If you have questions about the recent order, the most helpful information can be found in a FAQ at caresactprisoncase.org. Particularly useful is a link to a sample Form 1040 with highlighted instructions on how to fill out a 2019 return, including writing “EIP 2020” on the top of the form. If the person is still in a correctional facility, it also shows where to add the personal corrections number to make sure the stimulus check is sent to the right location and person.
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