Arizona is jumping on the free tax-filing bandwagon. Last Friday Gov. Janet Napolitano announced that the state had formed a public-private partnership with Intuit, Inc., which will allow qualified Arizona taxpayers to prepare and pay their state taxes electronically at no charge.
Arizona’s program is similar to the Free File Program, a partnership between the Internal Revenue Service (IRS) and 17 software makers. Intuit, which is also part of the federal software alliance, will be donating its TurboTax software for Arizona’s program. A company Web site has information for preparing and filing both federal and state returns. Arizona taxpayers who have an adjusted gross income of $27,000 or less and those who qualify for the federal Earned Income Credit are eligible for the state program.
Arizona launched the free program to encourage taxpayers to file electronically. The state has seen a dramatic rise in the number of tax returns being filed online. As of last week, the state reported that 530,000 individuals had filed tax returns electronically, an increase of 62 percent over last year. The state processes 2 million returns annually.
Arizona is the third state in the country to offer a free-filing program. It seems likely that others will follow for as Gov. Napolitano points out, “This partnership cost the state nothing and, in fact, will save the state a good deal." Intuit is the only software maker that offers free filing of state tax returns to qualified individuals.
On a national level, online tax filings have increased 9.9 percent so far this year. This rise can be attributed in part to the Free File program. Last week, AccountingWEB.com reported that 2 million taxpayers had filed their taxes through the program.