Thursday, February 25, 2021

COVID Tax Tip 2021-25: Free electronic filing options for military members and their families

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IRS Tax Tips February 25, 2021

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Issue Number: COVID Tax Tip 2021-25


Free electronic filing options for military members and their families

Active duty military personnel have multiple options for free federal tax preparation. One is IRS Free File. This program offers online tax preparation, electronic filing and direct deposit of refunds, at no cost.

Members of military and their families who have income below $72,000 may choose from any of the Free File tax software companies to help them prepare their tax returns online.

Free File Fillable Forms is available for those who have income above $72,000. Taxpayers who choose Free File Fillable Forms as their Free File option should be comfortable completing their own tax forms without the help of tax preparation software.

Taxpayers can use Free File on any personal computer, tablet or smartphone. Here's how it works:

  • The taxpayer goes to the Free File page on IRS.gov to see all Free File options. Some products are available in Spanish.
  • Military personnel who meet the income requirement can select from any of the providers that have "Free for Active Military for Adjusted Gross Income of $72,000 or less in their offer.
  • The taxpayer selects a provider and follows the links to their web page to complete and electronically file their tax return.

Electronic filing, including Free File is the best way to avoid pandemic-related paper delays. E-filing combined with direct deposit is the fastest way to get a refund.

Using Free File can help taxpayers figuring things like their earned income tax credit, child and dependent care credit and recovery rebate credit. If someone is eligible for a recovery rebate credit – and either didn't receive Economic Impact Payments or received less than the full amounts – they must file a 2020 tax return to claim the credit even if they don't usually file.

Taxpayers using Free File will need their prior-year adjusted gross income. This is required for all electronic tax returns as part of the user's electronic signature. For taxpayers who have filed before, their 2019 tax return will show their adjusted gross income. If their 2019 return has not yet been processed, they may enter zero as their prior-year adjusted gross income. People who used the Non-Filers: Enter Payment Info Here tool last year to register for an Economic Impact Payment, should enter $1 as their prior year AGI. People can visit IRS.gov for details on, claiming the recovery rebate credit if they aren't required to file a tax return.

Miltax is another free tax resource available for the military community, offered through the Department of Defense. MilTax is a suite of tax services available for members of the military, as well as qualifying veterans and family members. There are no income limits. MilTax includes tax preparation and electronic filing software, personalized support from tax consultants and current information about filing taxes. It's designed to address the realities of military life – including deployments, combat and training pay, housing and rentals and multi-state filings. Eligible taxpayers can use MilTax to electronically file a federal tax return and up to three state returns for free.

Active duty military stationed in combat zones have more time to file their tax returns. However, those with spouses and families may choose to file as soon as they can to claim various tax benefits for which they may be eligible. If only one spouse is present to file a joint return, they must have proper authorization to file a joint tax return on behalf of their spouse The IRS website has more tax information for members of the military.

 

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