How to file your taxes for free — including with Direct File, new to North Carolina

State eligibility

Direct File is available to those who lived and worked all year in one of these states:

• Alaska
• Arizona
• California
• Connecticut
• Florida
• Idaho
• Illinois
• Kansas
• Maine
• Maryland
• Massachusetts
• Nevada
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Carolina
• Oregon
• Pennsylvania
• South Dakota
• Tennessee
• Texas
• Washington state
• Wisconsin
• Wyoming

Wage Limitation

You can’t use Direct File if:

• If your wages are more than $200,000 ($168,600 if you had more than one employer).
• You file as Married Filing Jointly, and your spouse’s wages are more than $200,000 ($168,600 if your spouse had more than one employer).
• You file as Married Filing Jointly, and you and your spouse’s wages are more than $250,000.
• You file as Married Filing Separately, and your wages are more than $125,000.

You can use Direct File with these common savings accounts.

• Earned interest income from common accounts such as savings, checking, savings bonds, and treasury obligations
• Added or used money from a Health Savings Account (HSA)
• Added or used money from a Flexible Spending Account (FSA), sometimes called Flexible Spending Arrangements

You can use Direct File if you have:

• Contributions to employer-sponsored retirement plans, like a 401(k), pension, annuity, 403(b), or governmental 457(b)

You can’t use Direct File if you have:

• Distributions from employer-sponsored retirement plans, like a 401(k), pension, annuity, 403(b), or governmental 457(b)
• Contributions to or distributions from an Individual Retirement Arrangement (IRA)

Deductions

You can use Direct File only if you use the standard deduction, not if you have itemized deductions.

Credits

You can use Direct File with the following common credits, but not with others:

• Child Tax Credit
• Credit for Other Dependents
• Child and Dependent Care Credit
• Earned Income Tax Credit
• Premium Tax Credit
• Saver’s Credit (Retirement Savings Contributions Credit)
• Credit for the Elderly or the Disabled

More information on credits.

Free Tiers with Tax Prep Companies

Most tax prep companies have a fee-free tier for simple returns. Most will have similar eligibility requirements as TurboTax and H&R Block, which we’ve listed below.

TurboTax:

Free filing for simple Form 1040 returns. (No schedules except for Earned Income Tax Credit, Child Tax Credit, and student loan interest.) TurboTax says that around 37% of its filers file for free.

In addition, TurboTax offers free filing for certain populations, including enlisted active duty and reserve military and lower income taxpayers. Learn more here.

Included:

• W-2 income: Income reported on Form W-2 employment
• Interest and dividend income: Limited interest and dividend income reported on Form 1099-INT or Form 1099-DIV up to $1,500.
• Earned Income Tax Credit (EITC): Eligibility for the Earned Income Tax Credit.
• Child Tax Credit (CTC): Eligibility for the Child Tax Credit.
• Unemployment income: Unemployment compensation reported on Form 1099-G.
• Student loan interest deduction: Deduction for student loan interest paid.
• Retirement plan distributions: Taxable qualified retirement plan distributions reported on Form 1099-R.

Excluded:

• Itemized deductions: Taxpayers who choose to itemize deductions (e.g., mortgage interest, charitable contributions).
• Self-employment income: Income from self-employment or freelance work reported on Schedule C.
• Rental income: Income from rental properties reported on Schedule E.
• Capital gains and losses: Transactions involving the sale of stocks, bonds, or other capital assets.
• Business income and expenses: Income and expenses from a business or farm.
• Foreign income: Income earned outside the United States.
• Health Savings Accounts (HSAs): Contributions to or distributions from Health Savings Accounts.
• Other complex tax situations: Any other tax situations that require additional forms or schedules not supported by H&R Block Online Free Edition.

VITA and TCE Programs

The IRS’s Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free basic tax return preparation to qualified individuals.

VITA serves:

• People who generally make $67,000 or less
• Persons with disabilities; and
• Limited English-speaking taxpayers

TCE serves people who are 60 years and older.

There are many VITA and TCE sites in the Triangle, including in senior centers, community centers, churches and with other organizations. Search for one near you.

MilTax

Backed by the Defense Department and made exclusively for the military community, MilTax is free. It’s available to service members, eligible family members, survivors and recent veterans up to 365 days from their separation or retirement date. Learn more here.