The Free File Program is a service offered to help qualified taxpayers prepare and electronically file their federal income taxes free of charge. The IRS has partnered with a group of private tax software companies (known as the Free File Alliance), to provide this.
The Free File Alliance is the coalition working with the IRS to provide the Free File Program to American tax fillers. The Alliance is a limited liability company or LLC formed by different tax preparation software companies. Their mission is to provide an alternate way for moderate to lower income American families to prepare or file their income taxes online in a fast, free, and safe way.
The Alliance helps to give 70% of Americans the option to file their taxes for free with some of the industry's leaders in tax preparation software. Since 2003, Alliance members are continuing to work with the IRS to improve the program. Since this time, it has allowed for more than 75 million returns to be filed through the Free File program.
In 2017, the partnership added more state tax return options as well as easier-to-use W-2 input information. Easily importing W-2s can cut down on errors and make the tax process straightforward and faster. Note, not all providers work with all states to provide filing but with Efile.org you can file a state return in any state.
In 2001, the U.S. Office of Management and Budget’s Quicksilver Task Force initiated various programs to enhance government-to-citizen electronic capabilities. One of those initiatives is the Federal Free File program, launched in 2003, wherein the IRS allows qualifying taxpayers to do their taxes online for free through tax preparation software. The initiatives were intended to improve and expand Government to Government, Government to Business, and Government to Citizen electronic relations and possibilities.
The IRS was instructed 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 find a solution. As you can infer at this point, the result was the formation of the Free File Alliance, LLC. A group of tax software companies who provide commercial online tax preparation and electronic filing services was now working directly with the government to provide a free solution to consumers.
The government believed a partnership with private industry would: provide taxpayers with higher quality services by using the existing expertise of the private sector; maximize consumer choice; promote competition within the marketplace; and meet objectives in the least costly manner to taxpayers.
To qualify for the program for the tax year 2024, taxpayers could not have more than $84,000 of adjusted gross income (AGI). This meant that taxpayers who earned more than $84,000 in 2024 but had an AGI within the Free File $84,000 guideline qualified. A large percent of all income taxpayers in the United States, qualify for the program, but not all take advantage of it.
Taxpayers who qualify for Free File, which are usually households with strained budgets, welcome the concept of receiving quality tax preparation without high cost. However, those taxpayers should be aware that they might not automatically qualify for the Free File program, even if their AGI is $84,000 or less.
Lower-income taxpayers display similar trends to the broader population regarding tax preparation. Most people fill out their tax returns with assistance of paid preparers. In 2008, 55.8 percent of workers with adjusted gross incomes below $30,000 paid a tax professional to prepare their tax returns. Typically, lower-income taxpayers tend to have less complicated tax returns. Yet the number of these taxpayers paying for tax preparation is not significantly different from the percentage found in the broader population. Only a very small proportion of low-income families reported using Volunteer Income Tax Assistance, or VITA clinics. Therefore, the Free File program provides those taxpayers with some relief.
Free File is available 24 hours a day, seven days a week and the software is updated constantly to give American taxpayers the most up-to-date information to complete returns accurately. It allows taxpayers to receive refunds in half the time.
Every federal tax return is transmitted through a secure IRS e-file system and is completely safe. After each return is transmitted to the IRS, a confirmation email is sent to let the taxpayer know that his or her return was accepted.
The program currently has two options. Filers can use an Alliance software provider to file for free or they can use the IRS Free Fillable Forms. The latter doesn't necessarily walk you through preparing income taxes while holding your hand, but they do present the IRS tax forms you need on-screen to be filled in online. Most of the math will need to be done by you, the taxpayer, but the advantage associated with this filing option is that it is free to anyone regardless of their filing status, unlike using software provided by a Free File Alliance partner, which the filer must qualify for.
The eligibility qualifications for the Free File Program change from year-to-year. If you meet this guideline then you are eligible to file for free through the IRS's Traditional Free File Program. This is step one. This means you are good to go in on the IRS's end only and can file using the free fillable forms. Step two is finding a tax preparation software company that will work for you. Each tax preparation company has a their own eligibility requirements for using the free service. To file for free using their software, you must meet both the IRS and the company's criteria.
In the event you do not qualify to file for free with any of the software providers, but have less than $84,000 in adjusted gross income you can still file for free with the IRS, but in your case you will need to do so using the online fillable forms here. Filing this way will not support state forms. Most filers who pay state income tax will still pay additional fees of $10-30 to electronically file their state income tax returns.
The Traditional Free File option has step-by-step help for completing the income tax filing process. Using this option, you able to access a free tax software title through the IRS website and thereby avoid being charged for your return. You will see a notice that you are leaving the IRS website. The eligibility requirements for filing with this option change from year-to-year and, in some cases, from software provider to software provider.
Either way you choose, if you use to Free File there is a chance that the state filing may not be free of charge. Only 21 states have currently established free filing programs and these state programs have no affiliation with the national partnership between the IRS and the Free File Alliance.
To use IRS Free File, you can visit the IRS website here - https://www.irs.gov/filing/irs-free-file-do-your-taxes-for-free. Once here, visit the section on "Guided Tax Software" here you will find qualification information including a list of tax software companies who are part of the alliance. Select one which meets your needs and continue. You will be notified that you are being led off the IRS website and you will be taken directly to that company's website to begin the filing of your federal income tax return. Remember, you may need to access the company's software through the IRS website to get the benefits of the Free File Program.