IR-2018-60, March 16, 2018
WASHINGTON — The Internal Revenue Service announced that wrongfully incarcerated individuals have additional time to take advantage of the retroactive exclusion from income for any civil damages, restitution or other monetary award received in connection with their incarcerations. Under the Bipartisan Budget Act of 2018, a wrongfully incarcerated individual now has until Dec. 17, 2018, to file a related refund claim.
Under the wrongful incarceration exclusion, a wrongfully incarcerated individual does not include in income any civil damages, restitution or other monetary award received that related to his or her incarceration for the covered offense for which he or she was convicted. A set of frequently-asked questions, available on IRS.gov, provides details on who qualifies for the exclusion, awards that qualify and documentation and recordkeeping requirements.
To file a refund claim, an eligible individual taxpayer must file Form 1040X for each year he or she included a wrongful incarceration award in income and write “Incarceration Exclusion PATH Act” at the top of each Form 1040X.
The IRS has established a special filing address for amended returns claiming the wrongful incarceration exclusion. Send these Forms 1040X, along with any supplemental documentation, to:
Internal Revenue Service
333 W. Pershing
Stop 6503 5th Floor
Kansas City, MO 64108
Allow up to 16 weeks for processing. In most cases, taxpayers can then use the “Where’s My Amended Return?” application on IRS.gov to track the status of their refund claims.