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NY launches free e-filing tax tool: How will it work?

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  • Staff Report 

Governor Kathy Hochul announced a collaboration between New York State, Code for America, and the Internal Revenue Service to introduce a first-of-its-kind direct e-filing tool. Starting in 2024, eligible New Yorkers will be able to electronically file their state and federal taxes for free.

The new initiative is part of the IRS’s Federal Direct File Pilot Program, which aims to simplify tax filing, improve access to tax refunds, particularly for low-income families, and broaden taxpayer filing options. This e-filing tool will be integrated with the IRS’s federal e-filing system in a pilot initiative that also includes Arizona, California, and Massachusetts.

Code for America, a leading civic tech nonprofit, will develop the software for the New York filing system. Once in place, the system will allow taxpayers to e-file their state and federal tax returns seamlessly, eliminating the need for tax preparers and ensuring more equitable access to tax refunds.

Acting Commissioner Amanda Hiller of the New York State Department of Taxation and Finance remarked on the promising future of tax administration and the convenience it will bring to taxpayers. The initiative aligns with Governor Hochul’s commitment to making government more efficient and accessible to New Yorkers.

Eligibility for the tool will be mainly determined by the IRS’s Direct File Pilot parameters. The program is expected to encompass taxpayers with specific types of income, credits, and deductions, including W-2 wage income, Earned Income Tax Credit, and standard deductions. More details on eligibility will be released ahead of the tool’s launch.

This tax initiative received broad support from state officials, with senators and representatives applauding the move as an innovative step towards more accessible tax filing for New Yorkers and the broader public.

The IRS’s Direct File Pilot Program is part of a broader effort to revamp the IRS operations, which was funded by the 2022 Inflation Reduction Act. New York’s involvement in the pilot further solidifies its position as a state at the forefront of tech-driven governmental innovations.

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