Prisoners need to act fast for stimulus checks

People incarcerated across the country are now eligible to receive coronavirus stimulus checks from the federal government, but they need to act fast to meet a deadline early next month.

A federal judge in California recently ruled that the Internal Revenue Service can’t withhold stimulus checks from people solely because they are behind bars, ending a legal battle over whether prisoners could collect the funds. Attorneys representing two Californians who brought the class-action lawsuit on behalf of incarcerated people said they believe the judge’s order makes the stimulus checks available to as many as 1.5 million people across the country.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides up to $1,200 to individuals, with an additional $500 for each qualifying child.

At the request of the IRS, the Michigan Department of Corrections notified prisoners of the court ruling last week, corrections spokesman Chris Gautz said. Prisoners are being instructed to ask their facility for a claim form. Paper returns must be postmarked by Nov. 4, according to the judge’s order in the litigation.

Gautz said “many, if not all” prisoners are requesting the paperwork. The department housed roughly 34,500 people as of late last month.

The stimulus payments will be an important benefit to families who have felt the strain of having a loved one incarcerated, said Marilena David-Martin, deputy director of the State Appellate Defender Office.

“Families who have a provider who is incarcerated and not contributing are struggling even more so than the average person during this pandemic, so the stimulus checks can help an already struggling population during this time,” David-Martin said.

Prisoners who deposit the funds into their prisoner trust account will see money deducted for restitution – 50% of deposits of more than $50 per month is removed for restitution – as well as court fines, fees and orders, such as child support.

“We don’t intercept the IRS check, we only collect if and when it is deposited into the prisoner’s account,” Gautz said in an email.

Filing online

The state defender’s office, which represents indigent people appealing their criminal convictions, put together a packet explaining prisoners’ eligibility for the stimulus checks, which some attorneys have mailed to their clients.

David-Martin said the office also plans to host a workshop with a tax professional for formerly incarcerated people. The ruling benefits returning citizens who were imprisoned before and at least some time after March 27, according to the law firm that brought the class-action suit, Lieff, Cabraser, Heimann & Bernstein.

People who have access to a computer can file their claim online by Nov. 21.

For loved ones wondering whether they can fill out a claim on a prisoner’s behalf, Gautz said the Department of Corrections is directing them to contact the IRS or a financial consultant.

An FAQ on Lieff, Cabraser, Heimann & Bernstein’s website says IRS representatives have been giving conflicting information on whether a family member can file a claim online for a prisoner, and so the firm recommends filing a paper claim signed by the prisoner when possible.

An IRS spokesman said the agency cannot comment on ongoing litigation.

Decision changed

The win for prisoners comes after the IRS sent payments to some people behind bars earlier in the pandemic but later flip-flopped and asked for the money back.

The IRS paid nearly $100 million to nearly 85,000 incarcerated people before it reversed its position on prisoners’ eligibility in May, according to a report by the Treasury Inspector General for Tax Administration.

In the lawsuit against the government, attorneys for the plaintiffs argued the CARES Act did not exclude incarcerated people from receiving the stimulus checks.

The complaint said people in prison “have personal, financial, and other relationships that put them in need of economic assistance just like other members of society.” And as people in prison return to society, the stimulus funds will help mitigate recidivism, the attorneys wrote.