Exonerees can receive a special tax refund, thanks to a federal law that allows exonerees to recoup taxes paid on damages or restitution they received for their wrongful convictions.
However, the deadline for filing a claim — December 17, 2018 — is looming.
Eldan discussed with The Marshall Project his effort to inform exonerees, friends of exonerees and defense attorneys of the filing deadline. “No one else was going out and finding these people, and their refunds were going to expire,” Eldan told themarshallproject.org. “When it comes to how we treat these people when they get out, we turn our back on them and let them down a second time.”
“In total, Eldan said he has screened more than 400 exonerees and helped 13 people recoup a collective $1.6 million and eliminate nearly $500,000 in owed taxes,” The Marshall Project reports.
Exonerees aren't easy to locate. "The difficulty in targeting exonerees reflects the fact that there is little in the way of tracking and assisting exonerees post-release. And though 30 states maintain compensation statutes for exonerees, 20 states don’t offer compensation at all," reports themarshallproject.org.
"Under the federal Wrongful Conviction Tax Relief Act of 2015 (now codified as 26 U.S.C. 139F), any money received in relation to a wrongful conviction is now not taxable," reports saveourheroesproject.org. "Also, anyone who previously paid income tax on this money is eligible for a refund."
According to the IRS website, “The wrongfully incarcerated individual must file the claim for refund on an amended federal income tax return (Form 1040X) for the tax year the award was reported as income and write 'Incarceration Exclusion PATH Act' across the top of the Form 1040X." For more information on filing, see https://www.irs.gov/individuals/wrongful-incarceration-faqs.
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