TEN22-10Ch1acc.pdf

ETA Advisory File Text

EMPLOYMENT AND TRAINING ADMINISTRATION U.S. DEPARTMENT OF LABOR WASHINGTON D.C. 20210 NO. 22-10 Change 1 TRAINING AND EMPLOYMENT NOTICE DATE February 2 2011 TO STATE WORKFORCE AGENCIES STATE WORKFORCE LIAISONS COMPREHENSIVE ONE-STOP OFFICE MANAGERS AFFILIATE ONE-STOP MANAGERS STATE VETERANS AFFAIRS AGENCY DIRECTORS WIB - STATE CHAIRS WIB - LOCAL CHAIRS WIB - STATE EXECUTIVE DIRECTORS WIB - LOCAL EXECUTIVE DIRECTORS STATE UNEMPLOYMENT INSURANCE DIRECTORS FROM JANE OATES s Assistant Secretary SUBJECT Free File and Other Resources for Free Income Tax Preparation and Filing 1. Purpose . This Change 1 replaces and makes corrections to the previously issued Training and Employment Notice 22-10 to inform workforce system agencies and practitioners about Free File and other resources available to assist individuals in prepari ng and filing Federal and state income tax returns for tax year 2010. 2. References . None. 3. Background . The due date for filing Federal income taxes is April 18 2011 with state tax returns often due around the same time. A sometimes challenging and costly task tax return preparation leads the majority of Americans to pay for professional assistance in filing their returns. For low-to-moderate income individuals and households important deductions and credits available to the individual or family may be overlooked such as the Earned Income Tax Credit EITC . Furthermore many taxpayers forgo e-filing in favor of paper filing delaying the processing of tax refunds. However excellent free resources are available to assist low and moderate income individuals and families prepare and file Federal and participating state tax returns. State and local workforce agencies and practitioners are well-positioned to promote the availability of such resources to their customers and partner organizations. 4. Free File Program . Free File www.freefile.irs.gov is a public-private partnership between the Internal Revenue Service IRS and a number of electronic tax software companies that provides free on-line Federal tax preparation and e-filing services to millions of low and moderate income taxpayers. Twenty-one states also have a version of Free File. Free File is available at no cost to taxpayers or the government. 2 An estimated 70 percent of all taxpayers meet the income eligibility criteria for using Free File an adjusted gross income of 58 000 or less in 2010. Eligible taxpayers may use one of the 16 participating tax preparation software programs to prepare and e-file their taxes. The on-line programs provide step-by-step guidance and ask taxpayers simple questions to complete their tax returns. Free File helps taxpayers claim all the deductions and credits for which they qualify such as the EITC child care credits and elder care credits. Refunds may be available within 10 days if they file electronically and request dire ct deposit to their bank account. Eligible individuals living in any state may use Free File to prepare and file their Federal tax returns. In addition 21 states also participate in state versions of F ree File and eligible individuals in the following states may use Free File to file both Federal and state tax returns for free Alabama Arkansas Arizona Georgia Idaho Iowa Kentucky Michigan Minnesota Mississippi Missouri New York North Carolina North Dakota Oklahoma Oregon Rhode Island South Carolina Vermont Virginia and West Virginia. For non- participating states taxpayers may still be able to take advantage of the preparation and filing service to file their state tax return for a fee. Two companies offer their Free File tax preparation program in Spanish for preparing and filing Federal taxes. One company also offers the Spanish version of the software for preparing and filing the following state income tax returns California Michigan New York Pennsylvania and Montana. Taxpayers using Free File on a public computer such as at a One-Stop Career Center or library need not worry about private and confidential information being stored on the public computer s hard drive. All information is stored on-line on the servers of each individual Free File company. No information is stored on computer hard drives when filing on-line. Users may access their tax return at any stage of preparation with a user name and password from any Internet-enabled computer. Personal financial information is transmitted to the IRS by the Free File companies using the latest encryption technology. To take advantage of Free File Eligible participants should go to www.freefile.irs.gov and click on the Get Started tab at the top of the page. This page identifies the documents and types of information that individuals will need to complete their returns. Once individuals are ready to prepare their taxes they should click on the Get Started with Free File link and they will be directed to the IRS.gov Free File page at www.IRS.gov freefile . Select Get Help Finding a Free File Company. Users will need to select which of the tax preparation programs they want to use to complete and e-file their returns. By answering a few simple questions the IRS will help users select the best of the 16 tax programs for their situation. 3 To determine if taxpayers are eligible for free on-line state tax preparation and e-filing through the 21 state Free File programs they should go to www.freefile.irs.gov get-more- information.html and click on the link for their state under Free State Filing f or a list of free state offers in each Free File state. 5. Other Tax Preparation Resources . Other free tax preparation resources available to low and moderate income individuals include the IRS Volunteer Income Tax Assistance Program VITA and the Tax Counseling for the Elderly Program TCE . The VITA Program offers free tax preparation help to people who cannot prepare their own tax ret urns and whose income is generally less than 49 000. Certified volunteers sponsored by var ious organizations receive training to help prepare basic tax returns in communities across the country. VITA sites are generally located at community and neighborhood centers libraries schools shopping malls some One-Stop Career Centers and other convenient locations. Most locations also offer free electronic filing and some offer assistance with Free File. To locate the nearest VITA site call 1-800-906-9887 or check the partial V ITA site list on-line http www.irs.gov individuals article 0 id 219171 00.html . This list does not include every VITA site. The TCE Program provides free tax counseling and basic income tax return preparation to people aged 60 and older using trained volunteers from non-profit organizations. As part of the IRS-sponsored TCE Program AARP also offers a tax counseling program at more than 7 000 sites nationwide during the filing season for older individuals. For more information on TCE call 1-800-906-9887. To locate the nearest AARP Tax-Aide site call 1-888-227- 7669 or visit AARP s Web site at http www.aarp.org money taxes aarp taxaide . 6. Action Requested . ETA encourages state and local area workforce agencies and service providers to spread the word about these tax preparation resources to cu stomers and other partner organizations that reach low and moderate income individuals. The Free File microsite www.freefile.irs.gov on the IRS Web site provides a number of useful promotional materials including downloadable brochures and posters fact sheets frequently asked questions social media tools public service announcements and a number of other resources. One-Stop Career Centers should make use of these materials where possible hang up posters in their centers and become familiar with the Free File Web site in order to share information about this service with center customers. Access the array of Free File promotional materials at http www.freefile.irs.gov spread-the-word.html . Printed Free File brochures and posters may be ordered from the IRS National Distribution Center by calling 1-800-Tax-Form 1-800-829-3676 . The Free File brochure Publication 4821-A is available in English and Spanish. The Free File 11x17 poster Publication 4909 is available in English. ETA requests that service providers call the VITA and TCE Program phone numbers listed above to identify VITA and TCE Program sites in their local area and make this information available to customers and partners. While promotional materials for these programs are not available on-line ETA encourages service providers to create a handout or posting about these important programs. 4 7. Inquiries . For Free File questions may be directed to each individual tax software company s customer support desk. Phone numbers and contact information will be available to Free File users once they have selected a tax preparation company and begin their tax return. Inquiries for VITA and TCE Programs should be directed to the numbers provided above. 8. Attachment s . Frequently Asked Questions FAQs About Free File.