Prisoner Wages

[thomtax]

I have a first for me. Client is in prison and earned nominal amount of money teaching classes (approx. $250). There will be no W2 or 1099 issued. He wants to be sure he does nothing wrong so as to not cause him further problems.

Has anyone had this and where should, if at all, it be shown? He does have quite a bit of retirement income, interest, etc on the return.

I have searched the IRS website, but find no answers and using search on this site shows nothing.

Thanks for any reply.

LT

[OtisMozzetti]

Has anyone had this and where should, if at all, it be shown? He does have quite a bit of retirement income, interest, etc on the return.

We haven't heard the prisoner's age nor the amount of the "retirement income, interest, etc." which apparently was enough to create a filing requirement. Even if the age and the AGI meet requirements, the wages earned while a prisoner (even in a "halfway house") are not allowed (IRS Publ. 596) to be used for an earned income credit.

If your software has a W2 code with type = "prison inmate labor", then it will go to line 7 on Form 1040. It ought to go to line 7 in any event since it is wages.

[appelman]

I would report it as wages.

It would be similar to household employee wages that are below the threshold for a W-2. On the other hand, with such a small amount, you could also report it as Other Income on Line 21.

[thomtax]

Thanks

Thanks to both of you for your replies.

There is no concern about EIC or the other factors, just could not find if it being a prison deal, the income could be considered something besides wages.

LT