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Judge Rules That Jailed Recipients Can Collect Stimulus Checks

A hand holding a small American flag and a stimulus check from the U.S. Treasury.

Image source: Getty Images

For months, lawmakers have been arguing over the details of a coronavirus relief package that could, if passed into law, put a second stimulus check into the hands of desperate Americans. Under the CARES Act, which was signed in late March, recipients collected up to $1,200 per adult plus $500 per dependent, but at this point, much of that money has already been spent.

Some people, however, did not receive their stimulus cash under the CARES Act -- namely, those who are incarcerated.

The CARES Act did not expressly exclude jailed Americans from getting their money. However, the IRS later moved to withhold stimulus cash from those in prison. Close to 85,000 prisoners initially received their checks before the government changed its tune.

But now, Judge Phyllis J. Hamilton of the U.S. District Court for the Northern District of California has ruled that stimulus checks should not be withheld just because recipients are in jail. Which means incarcerated Americans could be in line for a windfall.

A bumpy path to paying prisoners

The IRS didn't initially withhold prisoners' stimulus checks. When the government decided to exclude that group, it had to scramble to ask prisoners who had already received the money to return it. It also instructed prisons to intercept payments when possible. But now, it looks like those in prison will be eligible for a stimulus -- though it's worth noting that the government plans to appeal the judge's ruling.

Of course, some prisoners who are eligible for stimulus checks may need to take action to get paid -- which could be easier said than done. Those who didn't file a tax return in 2018 or 2019 have until Nov. 21 to register their personal information on the IRS's online non-filer tool. But most prisons don't let inmates access the internet, so it's unclear as to how they'll pull that off.

Those who don't have internet access can file a paper claim for their stimulus cash, but those paper claims must be postmarked by Oct. 30. Furthermore, those who don't have a bank account can still apply to have a check mailed to them if direct deposit isn't an option.

Americans who are eligible for stimulus cash this year but don't get that money will be eligible to claim it as a credit on their 2020 tax returns, which are filed in 2021. But that may not help those who are incarcerated, as many of them may still be in jail come 2021 and won't necessarily want to file taxes.

What about a second stimulus check?

At this point, it's clear that even if the ruling stands and prisoners are allowed to collect their stimulus checks, putting that cash in their hands will be tricky. Another tricky situation to untangle? The status of a second stimulus round.

Initially, the hope was that lawmakers would get their act together before the November election so that payments could go out before the end of the current calendar year. At this point, the prospect of that happening is waning by the day. While lawmakers will be called on next week to vote on a limited relief bill, that package does not actually include a direct stimulus check. As such, Americans may have to sit tight and wait for that money -- along with their imprisoned counterparts who never got the cash they were entitled to.

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