How to file your state and federal taxes for free in Maine in 2023

Wheeler Cowperthwaite, Portsmouth Herald
·7 min read

The tax filing season officially started on Jan. 23 (it ends on April 18 for federal and Maine filings), which means employers, banks, brokerages and financial technology companies are sending out tax forms and advertisements for tax preparation software are flooding the Internet and airwaves.

There are three free ways to file your taxes this year. For most people, you can file your state and federal returns for free online, so long as your adjusted gross income is below $73,000, part of the IRS's "free file" program. The full list is available on the IRS's website at https://apps.irs.gov/app/freeFile.

While eight companies are participating in the program this year, just three offer free preparation of federal and Maine tax returns.

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For those with an adjusted gross income below $60,000, the IRS's volunteer tax preparer program is available, where IRS-trained volunteers prepare taxes for free, including in languages other than English. More on that below.

Finally, the IRS offers free fillable forms with the caveats that there is no step-by-step guidance, it offers limited basic calculations and does not support any state tax filings.

How do I know if I qualify for the free file programs?

Depending on the provider, the IRS Free File tops out at an adjusted gross income of $73,000 a year. Since it is adjusted gross income, that means it's your income for the year minus contributions to pre-tax retirement accounts like 401(k)s and 403(b)s.

The Volunteer Income Tax Assistance program is available to those with an adjusted gross income of $60,000 or less in 2022.

Filing your taxes for free via IRS Free File

For most people, the easiest way to file a federal and state tax return for free is to use one of the programs offered by the "Free File Alliance," an agreement that started in 2002 between the IRS and a group of for-profit tax preparation companies.

IRS Free File:Browse all the free tax filing options offered through the IRS Free File program

While the IRS bills the "Free File" programs as being open to people with an adjusted gross income of $73,000 or less, one program, TaxAct, offers free tax preparation for most people making that much in Maine, along with free state tax returns.

Two other companies offer free filing of both Maine and federal tax returns, but all have greater income and age restrictions, capping adjusted gross income at $41,000 a year for most people.

Tax backlog:IRS tax backlog smaller leading into 2023 tax season than it was in 2022

For those who live in Maine but work in a surrounding state other than New Hampshire, that means filing three total tax returns −one federal, one for Maine, and one for the state where they work. The programs vary on which states allow one to file a free tax return. That information is below.

TaxAct

TaxAct allows those 20 to 58, with an adjusted gross income cap of $73,000, to file their federal tax return for free as well as their Maine tax return for free. For active duty military, the only restriction is the $73,000 income limit.

For those who work in neighboring states but live in Maine, it also allows free state returns for Connecticut, Maine, Rhode Island, Vermont and New Hampshire, but not Massachusetts or New York. State returns for other states cost "no more than $54.95."

TaxAct has a second option for those 67 and older, with an adjusted gross income between $65,001 and $73,000. This option allows for free state returns in Maine, Vermont and Rhode Island, but not Connecticut, New York or Massachusetts.

FreeTaxUSA

FreeTaxUSA allows anyone with an adjusted gross income under $41,000 to file free federal and state tax returns. For active duty military, the limit is $73,000.

OnLine Taxes

OnLine Taxes, which also goes by OLT, allows anyone with an adjusted gross income under $41,000 to file free federal and state tax returns.

For those 67 and older, the income limit is $73,000, with free state returns in Maine, Rhode Island, Connecticut and Vermont but not New York or Massachusetts.

What is the Free File Alliance?

The "Free File Alliance" is an agreement that started in 2002 between the IRS and a group of for-profit tax preparation companies. Until 2019, the IRS agreed to not create a government-run system for people to easily prepare their taxes and in exchange, the companies promised to provide free online filing to low and middle-class taxpayers.

When the IRS signed the latest "Free File Alliance" agreement in 2019, it dropped its commitment to not create a competing tax filing system, as ProPublica reported.

Free tax help is available through the Volunteer Income Tax Assistance program

People with an adjusted gross income of $60,000 or less can receive free tax preparation services from trained volunteers throughout the state, part of the national Volunteer Income Tax Assistance, or VITA, program.

Tax assistance is offered in multiple languages. The IRS offers a location locator based on zip code, while Cash Maine also offers locations.

To receive the volunteer tax preparation services, individuals and families must not exceed $60,000 in adjusted gross income. Tax preparers will also not help if there are "unusual" types of income or expenses, like rental properties, farm income or self-employment income with more than $35,000 in expenses.

Other limitations include, no one in the household may have lived or worked outside of Maine in 2022 and no one could have been an active member of the military.

A non-exhaustive list of where to get free tax assistance in Maine if you qualify

  • York County Community Action, 6 Spruce Street, Sanford, 207-324-5762, x2718

  • Penquis CAP Dover-Foxcroft VITA, 50 North Street, Dover Foxcroft, 207-973-3500

  • Katahdin Higher Ed Ctr / EMCC VITA, One Dirigo Drive, East Millinocket, 207-973-3500

  • Penquis CAP - Lincoln VITA, 9 Main Street, Suite 2, Lincoln, 207-973-3500

  • Wabanaki CA$H - Four Directions, 20 Godfrey Dr., Orono, 207-866-6545

  • Orono Public Library VITA Intake, 39 Pine Street, Orono, 207-973-3500

  • Penquis CAP - Bangor VITA, 262 Harlow Street, Bangor, 207-973-3500

  • Central Maine CA$H Mobile VITA at Skowhegan HS, 61 Academy Circle, Skowhegan, 207-621-3430

  • UW Aroostook Houlton Center VITA, 91 Military Street, Houlton, 866-811-5695

  • UW Aroostook Fort Kent Center (formerly Medical Office), 40 Alfalfa Ave, Suite 102, Fort Kent, 866-811-5695

  • United Way of the Tri-Valley, 218 Fairbanks Road, Farmington, 207-778-5048

  • University of Maine at Augusta, 45 Winthrop St, Augusta, 207-621-3430

  • Machias Savings Bank - EMCASH VITA, 4 Center Street, Machias, 207-973-3500

  • United Way of Southern Maine, 550 Forest Avenue, Suite 100, Portland, 207-347-2335

  • Lithgow Library, 45 Winthrop St, Augusta, 207-621-3430

  • United Way of Aroostook, Presque Isle, 830 Main St Presque Isle, 207-764-3721

  • Waterville High School, One Brooklyn Ave, Waterville, 207-621-3430

  • United Way of Mid Coast Maine, 34 Wing Farm Parkway, Suite 201, Bath, 207-295-6340 or 207-751-3756

Getting the earned income tax credit

For the earned income tax credit, the income thresholds, range from $16,480 for a single person to $59,187 for a married couple, filing jointly, with three or more qualifying children.

Single or head of household earning less than:

• $16,480 – no qualifying children

• $43,492 – one qualifying child

• $49,399 – two qualifying children

• $53,057 – three or more qualifying children

Married, filing jointly, earning less than:

• $22,610 – no qualifying children

• $49,622 – one qualifying child

• $55,529 – two qualifying children

• $59,187 – three or more qualifying children

Reach reporter Wheeler Cowperthwaite at wcowperthwaite@providencejournal.com or follow him on Twitter @WheelerReporter.

This article originally appeared on Portsmouth Herald: File free federal and Maine state 2023 tax returns: A how to guide