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Federal judge rules inmates are now eligible to receive stimulus checks


Government plans to appeal

Photo by Andrew Burton/Getty Images

A federal judge on Wednesday ordered the Internal Revenue Service to stop withholding $1,200 coronavirus stimulus checks from people incarcerated in state or federal prisons.

What are the details?

According to a Thursday report in the New York Post, those inmates who are otherwise eligible to receive the stimulus checks under the CARES Act may receive them.

In April, the Internal Revenue Service distributed tens of thousands of stimulus checks totaling approximately $1 million to incarcerated taxpayers. Following the April release, the IRS revised the guidelines for the program, and insisted instead that incarcerated taxpayers did not qualify for the stimulus and should return the funds.

Following the announcement, a group of prisoners filed a class-action lawsuit in order to get the funds they felt they deserved. Yaman Salahi, partner at the law firm Lieff, Cabraser, Heimann & Bernstein, represented the prisoners in the suit.

In the Wednesday decision, Judge Phyllis J. Hamilton of the U.S. District Court for the Northern District of California said that President Donald Trump's administration move to block prisoners from receiving the stimulus funds "solely on the basis of their incarcerated status" is "arbitrary and capricious."

The Post added, "Hamilton set an Oct. 24 deadline for the IRS to reconsider sending the payments to locked-up individuals whose checks have been withheld, intercepted, or returned. Incarcerated people who didn't file a 2018 or 2019 income tax return — which would allow the IRS to automatically distribute their checks — have until Oct. 30 to submit paperwork to claim the money."

Anything else?

Salahi told the Los Angeles Times that such funds are especially important to those imprisoned, because they often come from low-income households who are in dire needs of financial assistance.

"[Incarcerated people] rely heavily on their loved ones on the outside for support, and those are the same people who are less and less able to provide that support during the pandemic," Salahi told the outlet.

The federal government in response filed an appeal of the judge's rulings.

According to CNBC, the IRS stated, "The government has filed an appeal and request to stay the preliminary injunction. Any updates regarding the appeal will be posted on this webpage."

The outlet reported that those prisoners who are eligible and do not receive their stimulus payments this year will be able to receive a credit for those funds when filing their 2020 tax returns.

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