How to file your taxes for free in Vermont in 2023

Wheeler Cowperthwaite, Burlington Free Press
·6 min read

The tax filing season officially started on Jan. 23 (it ends on April 18 for federal and Vermont 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 five offer free preparation of Vermont tax returns, and for Vermonters.

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For those with an adjusted gross income of $60,000 and below, the IRS's volunteer tax preparer program is available, where IRS-trained volunteers prepare taxes for free, including in languages other than English, like Spanish, Portuguese, Vietnamese, Arabic, French, Korean, Mandarin and Russian. 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, two programs, TaxAct and FileYourTaxes.com, offer free tax preparation for people making that much in Vermont, along with free state tax returns.

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

Three other companies offer free filing of both Vermont and federal tax returns, but all have greater income and age restrictions. Two of the programs cap adjusted gross income at $41,000 a year.

For those who live in Vermont but work in a surrounding state other than New Hampshire, that means filing three total tax returns −one federal, one for Vermont 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 Vermont 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 Vermont, it also allows free state returns for Connecticut, Maine, and Rhode Island, 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, Rhode Island and Connecticut but not New York or Massachusetts.

FileYourTaxes.com

FileYourTaxes.com allows those 66 and younger with an adjusted gross income between $8,500 and $73,000 to file their federal tax return for free as well as their Vermont tax return for free.

The program does not offer free state tax returns for any other states, which affects people who live in Vermont but work out of state.

TaxSlayer

TaxSlayer offers free federal filing for those who are 57 or younger with an adjusted gross income limit of $60,000, or for active military the income limit is $73,000.

TaxSlayer also offers free state returns for Rhode Island, Massachusetts, New York and Vermont, but not Connecticut or Maine. Other state returns cost $39.95.

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 the name 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.

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 to lower-income residents through the Volunteer Income Tax Assistance program

Those with an adjusted gross income at or below $60,000 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, including Spanish, Portuguese, Vietnamese, Arabic, French, Korean, Mandarin and Russian.

The IRS offers a location locator based on zip code.

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

  • Capstone Community Action Orange Co, 12 Prince St., Randolph, 866-652-4636

  • Capstone Community Action, Barre, 866-652-4636

  • Addison Community Action/CVOEO, 54 Creek Road, Suite A, Middlebury, 802-388-2285

  • Morrisville Capstone Office, 250 Industrial Park Drive, Morrisville, 866-652-4636

  • Franklin Grand Isle Community Action, 5 Lemnah Drive, Suite 5, Saint Albans, 802-527-7392

  • CVOEO, 155 Dorset St., Suite H5, South Burlington, 866-652-4636

  • BROC Community Action, 45 Union St., Rutland, 802-665-1711

  • SEVCA-Windsor Resource Center, 1 Railroad Ave., Windsor, 802-722-4575

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 Burlington Free Press: How to file free federal and state tax returns in Vermont in 2023