Tax Deduction for Sending Money to a Prisoner?

Can I take a tax deduction for the money I send to my son in prison and money I spend on clothing?

Dear Reader,

You cannot take a tax deduction for money sent to your son in prison -- or sent to anyone else, for that matter. Money, food, clothing, toys, and other items sent to a person is considered a gift, and gifts are not tax deductible. (The only exception to this is when you give money or other items to a qualified non-profit organization. Charitable donations can be included as an itemized deduction on Form 1040 Schedule A.) The short answer to your question is No.

However, if you provided more than half of the total support for your son, you may be eligible to claim your son as a dependent on your tax return. You can demonstrate that you provided most of your son's support if (1) your son lived with you for more than half the year, or (2) you can show that you spent more money on your son than the prison did. You did not say how long your son has been in prison. So let me provide an example.

Angela, a single parent, has two children, Barbara and Charles. Both children live with her. Charles gets in trouble with the law and goes to jail in July. Charles stays in prison the rest of the year. Based on this scenario, Angela is entitled to claim both her children as dependents on her tax return. One of the crucial tests for claiming a dependent is that the taxpayer must provide more than half of the child's total support. Since both children lived with her for more than 6 months, Angela can prove she supported them.

While this specific situation (an incarcerated dependent) is not mentioned in the tax law or IRS instructions, I based the scenario above on a Tax Court case from 2002 (T.C. Memo 2002-258 [PDF document]). The issue in that case was whether the parent could claim her son as a dependent and as a qualifying child for the earned income credit even though her son was in prison all year. The Tax Court reasoned that since the parent did not provide more than half of the child's support, the parent could not claim the son as a dependent. Furthermore, since the son did not live with his mom for more than 6 months of the year, the mom could not claim her son for earned income credit purposes.

By the same reasoning the Tax Court used, if your son did live with you more than half the year and if you provided more than half his total support, then you may be able to claim your son as a dependent and (if you qualify) for the earned income credit.

If your son spent all or most of the year in jail, then you cannot claim him as a qualifying child for the earned income credit. Also, if your son spent all or most of the year in jail, you will find it hard to prove to the IRS that you provided more than half of his total support.

For more information on claiming a dependent, you should read "Personal Exemptions and Dependents," (Chapter 3 of IRS Publication 17) for all the details about the criteria for claiming a dependent. I have also summarized the five criteria for claiming a dependent.

Yours,

William