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Now how many cigarettes will $250 buy?

August 26, 2009

Crime reportedly doesn't pay, but Uncle Sam recently handed out $250 checks to almost 4,000 jailed felons.

The payments were mistakenly issued as part of the American Recovery and Reinvestment Act, popularly known as the February 2009 stimulus law.

Under the Making Work Pay credit portion of the new law, workers have seen a smaller amount of payroll taxes withheld from their paychecks.

But folks who don't have jobs also got a stimulus benefit. Separate $250 checks were sent to 54.4 million beneficiaries of Social Security, veterans and
federal railroad payments.

Criminal behind bars And some of those check recipients are behind bars.

Excuse me in advance for pointing out the obvious: For the most part, the stimulus checks were sent in error.

Around 2,200 of the incarcerated recipients, however, can keep their checks. While jailed convicts generally are ineligible to receive federal benefits, the Social Security Administration says that inmates who were not in prison between November 2008 and January 2009 can legally
accept them.

As for the other inmates, federal officials are trying to track down the errant checks and get the money back.

The Boston Herald broke the story, noting that the Bay State's inmate recipients included a convicted first-degree murderer, three prisoners
jailed for second-degree murder and five convicted rapists.

Here in Texas, the Austin American-Statesman reports that prison officials held onto 240 stimulus checks that arrived at state lockups until
it was confirmed that the prisoners were eligible to receive the money.

After double-checking, LoneStar State officials sent back all 214 incorrectly issued Veterans Affairs checks. Seven of the 24 Social
Security checks that were sent to prisoners were cashed. The two recipients of stimulus-related Railroad
Retirement checks also were allowed to cash them.

The Social Security Administration Inspector General says his office also is investigating whether any improper payments were made to
dead beneficiaries, felons on the run from the law, individuals living
overseas and recipients no longer legally authorized to live in the
United States.

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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