Drake Tax - Wrongful Incarceration

Exclusion

Congress added the "Wrongful Incarceration Exclusion" in the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). Under the Wrongful Incarceration Exclusion, a wrongfully incarcerated individual who meets certain requirements does not include in income any civil damages, restitution, or other monetary awards received that relate to incarceration for the covered offense for which he or she was convicted.

Eligible taxpayers may be able to file an amended return to claim this exemption. The wrongfully incarcerated individual must file the claim for refund within the later of either:

• three years from the date the income tax return was filed that previously reported the award

• two years from the date the individual paid the tax on the award

If filing an amended return to claim this exemption, write Incarceration Exclusion PATH Act on the top of the printed Form 1040-X. For details on amending a return in Drake Tax, see Drake Tax - 1040: Generating an Amended Return (Drake19 and future).

For more information about this exclusion, see the Wrongful Incarceration FAQs.