Buffalo, N.Y. (WBEN) - As of Monday, New York State taxpayers now have the option to file their federal income tax with IRS Direct File, a new service that gives taxpayers the choice to electronically file at no cost.
Originally limited to government workers in the beginning of this year, the direct file services now gives taxpayers in 12 states a step-by-step guide to help you understand your taxes and gives you the option to get live online support from IRS staff Monday through Friday, 7 a.m. to 10 p.m. EST.
"We don't know exactly how well or not well, it's going to work," says Jill on Money's Jill Schlesinger. "But the IRS is experimenting with this new way to file taxes and it is open to taxpayers in 12 pilot states of which New York is one. And it sounds pretty cool, because there's no software, it's mobile- friendly. They say it's easy to use, it's secure, it's accessible, and it's free."
As Schlesinger mentions, this program is in it's pilot stage, which means that Direct File only supports a limited set of tax situations. Eligibility to participate in the Direct File pilot is limited to reporting only certain types of income and claiming limited credits and adjustments.
This includes:
Income reporting
- W-2 wage income
- Social Security and railroad retirement income
- Unemployment compensation
- Interest of $1,500 or less
Credits
- Earned Income Tax Credit
- Child Tax Credit
- Credit for Other Dependents
Deductions
- Standard deduction
- Student loan interest
- Educator expenses
Jill on Money's Jill Schlesinger notes what you can't do with the Direct File.
"The pilot is not open to you if you have gig work, like let's say you have four different jobs, and they all bring in streams of income differently or business income. Also, if you itemize deductions - I know only 10% of taxpayers itemize - you can't do it."
But Schlesinger does mention that before you start to file, the IRS will ask a series of questions prior to see if you qualify.
In addition, filers don't have to use a laptop or desktop computer, taxpayers can file on their smartphones and tablets as well.
EG Tax President Esther Gulyas also notes that there is no income threshold.
"If your your [annual] income exceeds $79,000, then some of the software developers like H&R block, or TurboTax, will not do it for free. But if you use the direct file directly with the IRS, it's open 24/7, to anybody who wants to file."
Direct File does not replace existing filing options like tax professionals, IRS Free File, free return preparation sites, commercial software or authorized e-file providers. Taxpayers will continue to have choices, whether they want to use a tax professional, a software product, Free File, free tax preparation services like Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) as well as a paper tax return or Direct File.
You can click here to find out if the Direct File is right for you, listed by state on the IRS website.
This new service is available until the tax filing deadline of April 15, 2024.