NY taxpayers may soon be eligible for free filing

Benjamin Franklin once famously quipped that “in this world, nothing can be said to be certain, except death and taxes.” If the ads that are popping up everywhere for tax-filing services are any indicator, it’s time once more to start grappling with that most vexing of yearly responsibilities. The good news is that the IRS has launched a new Direct File pilot program, and eligible New York taxpayers may be able to file their tax returns directly with the IRS for free. Don’t get too excited just yet, though. The rollout is being done in phases and isn’t expected to be available until mid-March, and even then not all New York residents will be eligible. Check your eligibility here.

Still, while the IRS works out the details, here’s an overview of the program and what you need to know:

What Is Direct File?

The IRS’s Direct File program is designed to allow eligible taxpayers to file their federal taxes online, for free, directly with the IRS. (It makes so much sense, it’s honestly shocking that this hasn’t been an option all along.) Think of it as just another filing option, like using TurboTax or H&R Block, but it cuts out the middlemen. 

Direct File was built at the IRS by a team of tax experts, product managers, software engineers, designers and data scientists, according to IRS.gov.

You won’t need to buy or install software (phew!) and Direct File is mobile-friendly as well. (As convenient as that sounds, can you imagine filing your taxes on your phone? Can one even squint hard enough to make that work?) It is available in English and Spanish, and was designed to be accessible, secure and easy to use. Just like other e-filing services, you will be guided through a step-by-step checklist and your progress will be displayed as you proceed. When you finish, you’ll receive a clear summary of your 2023 federal taxes based on the information you entered, and you’ll get email confirmations for your submission and upon acceptance of your return.

Who Is Eligible?

Not everyone is eligible to participate in the Direct File pilot program. The most comprehensive way to find out if you are eligible is to visit the Direct File page, but basically you may (eventually) be eligible to use Direct File if you report these items on your 2023 federal tax return:

Income

  • W-2 wage income
  • SSA-1099 Social Security and RRB-1099 railroad retirement income
  • 1099-G Unemployment compensation
  • 1099-INT Interest income of $1,500 or less

Credit

  • Earned Income Tax Credit
  • Child Tax Credit
  • Credit for Other Dependents

Deductions

  • Standard Deductions
  • Student Loan Interest
  • Educator Expenses

The program is not an option for those with other types of income (like “gig economy” or business income), or those who itemize deductions or claim other credits like the Child and Dependent Care Credit, Saver’s Credit or the Premium Tax Credit.

Important Things to Note:

You’ll still need to file your state taxes separately. However, New York is one of four states in which the Direct File pilot will guide you to a state-supported tool you can use to prepare and file your state tax return. 

Also, Direct File will offer real-time online support from IRS customer service representatives. Yes, this means that if you get stuck, you can talk to an actual person from the IRS for help.

Top image by NoDerog from Getty Images Signature, via Canva.com.


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