Myths About Taxes for the Incarcerated

It’s that time of the year again. People across the U.S. are beginning to collect documentation to prepare for their annual tax filings. However there is a segment of Americans who have to deal with the often confusing situation that arises when one of the household members are incarcerated. As if taxes weren’t confusing enough as it is!

There is a lot of misinformation out there that is commonly held as being true when it comes to how to account for an incarcerated family member on your tax filings. Here are some of the most common ones.

Myth #1: You Can Claim An Incarcerated Person As A Dependent

The answer to this is maybe. The IRS has very specific rules (what they often refer to as ‘a test’) that restrict who you can claim as a dependent on your tax return. You can go through an online interview on the IRS’s website to see here. Please note, that post-conviction incarceration is seen as the person being absent from your household — so not a temporary absence (like the military).

Your child under the age of 24 can perhaps meet the test. In addition to children, the IRS allows for you to claim ‘qualifying relatives‘ as a dependent. Those are:

• Your child, stepchild, or foster child, or a descendant of any of them (for example, your grandchild). (A legally adopted child is considered your child.)
• Your brother, sister, half brother, half sister, stepbrother, or stepsister.
• Your father, mother, grandparent, or other direct ancestor, but not foster parent.
• Your stepfather or stepmother.
• A son or daughter of your brother or sister.
• A son or daughter of your half brother or half sister.
• A brother or sister of your father or mother.
• Your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.

So the list is pretty extensive! But take note that ‘spouse’ is not included on there. So if your husband or wife is incarcerated, then the answer is no, you will not be able to claim them as a dependent.

Myth #2: Incarcerated People Can’t (Or Aren’t Required To) File Taxes

Before I respond to this myth, we need to first establish two facts:

1. The requirement to file a tax return largely rests on the amount of income that you received. There are other U.S. citizens that are required to file regardless of income, like those living abroad or if you are self-employed. Again, there is an online tool that you can use to see if you are required to file.
2. Any U.S. Citizen with any income can file a tax return if they want to, whether they are required or not

Ok, so getting back to the myth. Incarceration doesn’t bar a U.S. citizen from filing taxes. In fact, if an incarcerated individual earned more than $15,750 in 2025, then they are required to do so. The kicker is that the majority of incarcerated people did not make that minimum income threshold. So there is no requirement for them to file taxes.

Myth #3: I Can’t File A Joint Tax Return With My Incarcerated Spouse

The IRS is silent in regards to the incarceration status of the tax filer(s). For some reason, there are a lot of people who think that once your loved one is incarcerated, then they become ‘property of the state/Feds’ — and that simply isn’t true.

But one thing that the IRS is not silent on is what it means to be married. The IRS does require you to be legally married to the person that you are filing jointly with. The exception to this rule is if you live in a state that recognizes common-law marriage. Those states are: CO, IA, KS, MT, NH, OK, RI, SC, TX, UT + the District of Columbia. If you do live in one of those states, then you need to fulfill the state’s requirements for a common-law marriage.

You’ll also need to complete the IRS Form 2848, which is the power of attorney document that authorizes you to sign tax returns on your spouse’s behalf. Then you are good to go. So this myth is busted.

Myth #4: You Aren’t Responsible For The Tax Debt Of An Incarcerated Loved One

For this one, it depends. If you have an incarcerated dependent, then no — their debts and tax liability is not taken on by you. But if your incarcerated spouse has an active tax interception (i.e. – because of outstanding child support, back taxes or a defaulted student loan), then yes, you can also have your tax liability go up or have your tax refund reduced.

The first step should be putting in a call to the Treasury Refund Offset number at (800) 304-3107. There you will get information on whether or not there is a balance that is scheduled to be offset from your tax refund. If there is, then you want to complete IRS Form 8379 – Injured Spouse Allocation. This will allow you to collect your portion of the tax refund. Alternatively, you can also change your filing status to ‘Married – Filing Separately’. Just be advised that if you go this route, your effective tax bracket will change.

Myth #5: Money Spent On An Incarcerated Individual Can Be Counted As A Charitable Donation.

The answer to this is no; only money given to an organization can be seen as a ‘charitable donation’ — not to an individual (incarcerated or not).

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Hopefully this post is helpful. If so, I would love to get your feedback below. Or if you are a tax professional, I would love to hear from you too!