ten_30_11_acc.pdf

ETA Advisory File Text

TRAINING AND EMPLOYMENT NOTICE NO. 30-11 DATE February 22 2012 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 Tax Year 2011 1. Purpose. This Training and Employment Notice 22-10 is to inform workforce system agencies and practitioners about Free File and other resources available to assist individuals in preparing and filing Federal and state income tax returns for tax year 2011. 2. References. Training and Employment Notice TEN 22-10 Change 1 Free File and Other Resources for Free Income Tax Preparation and Filing. 3. Background. The due date for filing Federal income taxes is April 17 2012 with state tax returns often due around the same time. Perceiving tax preparation to be challenging and complex many Americans pay for professional assistance in filing their returns. For low-to- moderate income individuals and households it is critical that important deductions and credits available to the individual or family such as the Earned Income Tax Credit EITC or Health Coverage Tax Credit HCTC are noted. In addition electronic filing e-filing should be encouraged as returns are processed significantly faster through e-filing as compared to paper filing. The IRS has a number of excellent free resources available to assist low-to-moderate income individuals and families prepare and electronically file Federal and participating state tax EMPLOYMENT AND TRAINING ADMINISTRATION U.S. DEPARTMENT OF LABOR WASHINGTON D.C. 20210 2 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.irs.gov freefile is a public-private partnership between the Internal Revenue Service IRS and a number of electronic tax software companies that provides free online Federal tax preparation and e-filing services to millions of low-to- moderate income taxpayers. Taxpayers have given IRS Free File program a 98 percent customer satisfaction rating in consumer survey research. According to the Office of Management and Budget the Government Accountability Office and the U.S. Department of Treasury Free File has saved the IRS over 104.8 million in paper processing by converting these to e-filed returns. An estimated 70 percent of all taxpayers meet the income eligibility criteria for using Free File an adjusted gross income AGI of 57 000 or less in tax year 2011. This limit applies to the AGI reported on an individual s tax return even if filing jointly with a spouse. The income limit was lowered from 58 000 in tax year 2010. For individuals who do not meet the income eligibility requirement Free File includes forms which enable all taxpayers to manually enter their Federal tax data and e-file their Federal return directly to the IRS for free. However these taxpayers will not have the benefit of using tax preparation software. Individuals who do meet this income eligibility requirement may use one of the 15 participating tax preparation software programs to prepare and e-file their taxes. The online 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 HCTC child care credits and elder care credits. Refunds may be available in as little as 10 days for taxpayers who file electronically and request direct deposit to their bank account 90 percent of taxpayers will receive their refund within 21 days. To check the status of a refund taxpayers can access the Where s my refund link at https sa1.www4.irs.gov irfof lang en irfofgetstatus.jsp . Eligible individuals living in any state may use Free File to prepare and file their Federal tax returns. In addition for tax year 2011 22 states are participating in state versions of Free 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 Indiana 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. In addition to English some companies offer Free File tax preparation program in Spanish for preparing and filing Federal taxes. Additional information on Free File tax preparation in Spanish can be found at http www.freefile.irs.gov es . 3 To take advantage of Free File First-time users are encouraged to go to www.irs.gov freefile and click on the video link for a brief introduction to Free File. Instructions on how to get started are provided in the video. Eligible individuals may also go to www.freefile.irs.gov and click on the Get Started tab at the top of the page. This page provides additional preparation and guidance and directs the user to the www.irs.gov freefile page when they are ready to get started. www.irs.gov freefile directs users to Choose a Free File Option and offers a tool that will help users after answering a few simple questions to select the best available tax program. To get started click on the Get Help Finding a Free File Company link. To determine if taxpayers are eligible for free online state tax preparation and e-filing through the 22 state Free File programs go to www.freefile.irs.gov get-more-information.html and click on the link under Free State Filing for a list of free state offers in each Free File state. 5. Other Tax Preparation Resources. Other free tax preparation resources available for low- to-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 for people who cannot prepare their own tax returns and whose income is generally less than 50 000. Certified volunteers sponsored by various 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 access an online directory for free tax preparation help at http irs.treasury.gov freetaxprep . The TCE Program provides free tax counseling and basic income tax return preparation for people 60 years 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 website 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 customers and other partner organizations that reach low-to-moderate income individuals. The Free File microsite www.freefile.irs.gov on the IRS website provides a number of useful promotional materials including downloadable brochures and posters fact sheets Frequently Asked Questions FAQs social media tools Public Service Announcements and a number of other resources. The Free File brochure Pub 4948 and Free File 11x17 poster Pub 4909-A are available in both English and Spanish. 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 website 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 partners.html. 4 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 online ETA encourages service providers to create a handout or posting about these important programs. 7. Inquiries . For general questions about Free File contact the IRS at 1-800-829-1040. Specific questions about Free File 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.