With tax season almost over do not overlook filing a federal tax return for an inmate. Any inmate receiving income from investments, income earned while not incarcerated, or has a spouse with income may need to file a federal tax return. A federal tax return also needs to be filed if you or your family received an advanced payment for the Premium Tax Credit.
Types of Taxable Income*
Taxable income is the amount of income used to calculate the tax due on a tax return. There are many types of income and not all are taxable. Generally, the following are taxable:
- Income from an employer
- Investment income
- Self employment income over $400
- Social Security Retirement
- Social Security Disability (depending on your income)
- Unemployment benefits
- Gambling winnings
- A cancelled or forgiven debt
*This is not a comprehensive list, there are other types of taxable income
Income Limits and Filing Status
Whether or not you are required to file a federal tax return depends on your filing status, age, income, dependency status, and other special requirements. Even if you are not required to file a tax return, there are reasons you may want to file.
Use the following table to determine if the incarcerated individual (or family) earned enough to file taxes.
Minimum Gross Income (under 65)
|Minimum Gross Income (65+)|
|Head of Household||$13,350||$14,900|
|Married Filing Jointly||$20,700||
$21,950 (one spouse)
$23,200 (both spouses)
|Married Filing Separately||$4,050||$4,050|
|Widow with Dependent Child||$16,650||$17,900|
Prison Wages and Child Tax Credit (CTC)
Income earned by an inmate while incarcerated does not qualify as earned income for the Child Tax Credit (CTC). However, income earned prior to incarceration or earned by a spouse may qualify for CTC.
Prison Wages and Earned Income Tax Credit
Inmates are not allowed to take the Earned Income Tax Credit based solely on prison wages. Income that was earned prior to incarceration or earned by the spouse may qualify for the Earned Income Tax Credit.
Inmates and ACA Requirements
For all months a person is incarcerated (even if it is just one day in a month), the inmate is exempted from the ACA insurance requirement to maintain minimum coverage for that month. The inmate will need to claim an exemption using IRS Form 8965, Health Coverage Exemptions. Part III should be completed using exemption type F.
Charitable donations to a specific inmate are not tax deductible. Only contributions to a qualified charitable organization may be deducted. Even donations to a fundraiser that is held for a specific inmate are not tax deductible. Neither are donations intended to assist a wrongly convicted inmate to pay for legal fees.
File a Tax Extension
If time is running out and you cannot file the tax return by the deadline then file for a tax extension to extend the time to file to October 15th. If you owe taxes you'll receive a penalty if you do not pay the taxes due when you file the extension. File IRS Form 4868 for an Automatic Extension of Time for an Individual Income Tax Return.
Grant Someone Power of Attorney
If you are incarcerated then considered trusting someone to complete your taxes for you. If your filing status is a joint return, then you can fill out your portion and mail it to your spouse. Or you can have your spouse complete the tax forms and then mail them or bring them to you to sign and send them back. Otherwise, consider designating a trusted individual as your Power Of Attorney for your financial matters. There are forms to be completed and they must be signed in front of a notary public and notarized. A Power of Attorney authorizes someone else to sign your tax return and act on your behalf concerning financial matters. An original signed Power of Attorney must be mailed along with the tax return to the IRS.