The Grammy-award winning singer pleaded guilty to tax evasion charges June 2012.
Hill failed to report more than $1.8 million in taxes from 2005 to 2007.
The AP reports the minimum security prison in Danbury houses inmates in dormitory-like living spaces where they are expected to perform maintenance, food service, and landscaping jobs.
The singer originally faced up to three years in prison for misdemeanor counts of federal tax evasion. Hill paid back more than $900,000 in back taxes due earlier this year.
In May, the former Fugees singer was sentenced to three months in prison.
Hill revealed in a Tumblr post last year she failed to file her taxes as a form of outright civil disobedience saying she "embraced [her] right to resist a system intentionally opposing [her] right to whole and integral survival."
Hill recently debuted her first song in years this past May titled "Neurotic Society."