Filing taxes in NY in 2024? You can do it for free through a new pilot program
New Yorkers will be able to more easily file their online taxes for free next year under a pilot program launched by the Internal Revenue Service in collaboration with the state.
Through the Direct File pilot, taxpayers can file their federal taxes directly with the IRS and then use a state-supported filing tool to file their state tax return, all for no cost.
“Thanks to this first-of-its-kind partnership, New York is taking a major step toward modernizing our tax system and making it even easier for New Yorkers to access their tax benefits,” Gov. Kathy Hochul said in a written press release.
“No one should have to navigate complex processes or pay out of their own pocket to file their taxes, and starting next year, we’re equipping New Yorkers with a new, innovative, free tool to give taxpayers more choices to file."
Here's what you need to know about the new program, and who is eligible to file for free next year.
How the free program works
In 2024, eligible taxpayers will be able to use the IRS' federal Direct File tool to file their federal taxes, which the IRS says "will be an interview-based, mobile-friendly service that will work as well on a smartphone as it does on a laptop, tablet or desktop computer."
After completing their federal return on the IRS website, New Yorkers can transport that data from the Direct File tool to the state filing tool created by Code for America, a nonprofit organization that builds equitable and accessible digital tools, which New York is partnering with to build the state's filing software.
The state filing tool will then ask a few additional state-specific questions and file your state tax return for you, free of charge.
“IRS Direct File has the power to transform access to the tax system, making filing simpler and more equitable for taxpayers," Code for America CEO Amanda Renteria said. "This tool will ensure that eligible residents of the Empire State can access the billions of dollars in state tax benefits they are due.”
Why New York is included
New York is one of four states, joining Arizona, California and Massachusetts, that impose an income tax that joined the pilot program, according to the IRS.
The state said the partnership "represents a promising new approach to streamlining state tax filing," and will promote more equitable access to tax refunds, particularly for low-income families.
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Are you eligible?
According to the IRS, NYS Dept. of Taxation and Finance and Code for America, in order to file for free under the pilot next year, a taxpayer must:
Live in New York all year and have no income from another state.
Have only the following sources of income: wages, Social Security benefits, unemployment benefits, up to $1,500 of interest.
Want to claim the Earned Income Tax Credit, Child Tax Credit, or Credit for Other Dependents.
Have no self-employment income, including from gig or contract work.
Not claim the Premium Tax Credit, Child or Dependent Care Credit or American Opportunity Tax Credit or other educational credits.
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How you can file for free in New York
At the moment, details are limited.
Both tools will be available early 2024 and more information will be released ahead of the pilot launch.
And further down the line, once it's fully implemented, the state says eligible New Yorkers will be able to jointly e-file their state and federal tax returns with state and federal tax authorities for free, without the use of tax preparers.
“The lessons we learn from this pilot will help ensure that Direct File, when fully implemented, will meet the needs of New York taxpayers," says Acting Commissioner of the New York State Department of Taxation and Finance Amanda Hiller. "This really is the future of tax administration, with government providing a convenient, reliable and free tax return filing service.”
Emily Barnes is the New York State Team consumer advocate reporter for the USA TODAY Network. Contact Barnes at ebarnes@gannett.com or on Twitter @byemilybarnes.
This article originally appeared on Rochester Democrat and Chronicle: Filing taxes in NY? It'll be free next year with new pilot program
