Free File

In November 2001, the U.S. Office of Management and Budget's (OMB) Quicksilver Task Force established 24 e-government initiatives that were a part of the President's Management Agenda. These initiatives were designed to improve Government to Government, Government to Business, and Government to Citizen electronic capabilities.[11]

One initiative, IRS Free File, instructed the IRS to provide free and secure online tax return preparation and filing services to taxpayers. In accordance with this OMB directive, the IRS began working in partnership with the tax software industry to develop a solution. The result was the formation of the Free File Alliance, LLC, a group of tax software companies who provide free commercial online tax preparation and electronic filing services.[11]

According to investigations by the news organization ProPublica,[12] TurboTax maker Intuit allegedly engaged in practices that hid the Free File Program from eligible taxpayers, and attempted to trick eligible taxpayers into paying for services they might be eligible to receive for free.

In 2020, H&R Block ended its participation in the Free File Program.[13] In July 2021, Intuit announced that its TurboTax product would no longer participate in the Free File Program effective as of the 2021 tax season.[14] For tax-filing season 2023, seven tax software companies are participating in the Free File Program.

The Free File Alliance is a consortium of commercial tax preparation software providers that offer their brand-name tax software products for free to lower and middle-income tax filers. Each member is allowed to set eligibility requirements for their software products. However, the cumulative offers must allow 70 percent of U.S. taxpayers - approximately 100 million people - to be eligible for at least one product.[15] Each year, the income limit for eligibility is adjusted to reach 70 percent of the taxpayers. The income limit for 2022 (tax year 2021) is set at $73,000, though some Free File software providers choose to set the income threshold lower. Agreements between the IRS and the Free File Alliance are publicly available.[11] The latest memorandum of understanding was signed in 2021 and runs through 2023.[16]

The Free File Program, a public-private partnership between IRS and private-sector tax software companies, allows lower- and middle-income taxpayers to use name-brand tax preparation software to prepare and file tax forms for free.

For 2022, anyone whose adjusted gross income is $73,000 or less will be eligible for at least one software product. There are 7 products from which to choose. Each software provider sets its own eligibility requirements, generally related to income, state residency, age, military service or eligibility for the earned income tax credit. Free File is free for federal tax returns only. However, some Free File Alliance members offer state return software for a fee or for free. Most of the software products, but not all, use an interview format in which you are asked questions and your answers are used to populate the electronic form. This format helps taxpayers get the tax credits and deductions to which they are eligible. It also means taxpayers do not have to be experts in income tax law. Alliance members cannot sell any refund anticipation loan products through the Free File service.

To use IRS Free File, taxpayers generally go through the IRS website at www.irs.gov/freefile. There, taxpayers can find a tax software product one of two ways. They can review a list of companies and their offers. Or, they can use a simple web tool that asks a few questions - such as income, state residency and age - and the tool will locate those software products for which taxpayers are eligible. Once a taxpayer chooses a product, they will be directed off the IRS.gov site and onto the Alliance member's website to complete their federal tax return.[17]

Taxpayers can also access the free file option of the participating software companies by accessing the direct links below. For tax year 2022, there are 7 participating Free File Alliance members with the following requirements to qualify to use their software for free under the Free File program:[18]

• FreeTaxUSA.com, AGI of $41,000 or less. Free state return included.
• Online Taxes at OLT.COM, AGI of $41,000 or less (or less than $73,000 if age 67 or older). Free state return included.
• TaxAct.com, AGI of $73,000 or less AND age between 20 and 58. Free state return in some states.
• TaxSlayer.com, AGI of $60,000 or less AND age 57 or younger. Free state return in some states.
• FileYourTaxes.com, AGI between $8,500 and $73,000 AND age 66 or younger. Free state return in some states.
• 1040NOW.net, AGI of $65,000 or less AND resident of certain states. No free state returns.
• ezTaxReturn.com, AGI of $73,000 or less AND resident of certain states. No free state returns.

Another component of Free File is Free File Fillable Forms, which is available to all taxpayers, including taxpayers whose adjusted gross incomes (AGI) are greater than $73,000. It is an alternative to Free File Software, although both are free. Free File Fillable Forms is operated by a private organization, the Free File Alliance and not the IRS. Though IRS links to it, they do not endorse it or any product.[19][20][21][22][23]

Free File Fillable Forms is an electronic version of IRS paper forms. Free File Fillable Forms does not include any elaborate cross-checking or question-and-answer formats (such as is found in many of the Free File Software packages), instead it is a simple fill-in-the blank format (however, it does perform math calculations). Free File Fillable Forms is best for taxpayers who are comfortable preparing their own tax returns or who have been long-time paper filers. There are no income restrictions for using Free File Fillable Forms. It does not support any state tax returns.[19][20][24][22][23]

• http://www.freefilealliance.org/
• https://www.irs.gov/FreeFile
• Free File Agreements - irs.gov
• Free File Software Offers - irs.gov
• Free File Software Lookup Tool - irs.gov
• Free File: Everyone Can File an Extension for Free - irs.gov
• Free File: Do Your Federal Taxes for Free - irs.gov
• Free File Fillable Forms