California residents may e-file their state tax returns for free if they meet certain criteria.
According to the State of California Franchise Tax Board, over six million California residents are eligible to e-file their 2007 state income tax returns for free.
Who Qualifies for Free State Tax Return Filing through CalFile
There are some exceptions, but generally speaking, anyone who lived in California the entire year, is filing an original return (i.e. not amended), and whose only other reportable tax is Use Tax, may qualify to use CalFile. The state has set qualification criteria, which is listed on the Franchise Tax Board website. In general, those eligible for CalFile must claim five or fewer dependents and have federal adjusted gross income (AGI) below $155,416 per individual filer. (This limit is $233,129 for head of household and $310,837 for married/registered domestic partnership, filing jointly and qualifying widowers). Additionally, there is qualification criteria related to sources of income, federal AGI adjustments, state adjustments to income, itemized deductions, tax payments, exemptions, and credits.
California taxpayers may use CalFile whether they do not owe taxes, owe a payment, or are due a refund.
Who Cannot Use CalFile
The FTB website lists several exceptions that prohibit an individual from using the free filing program. Among taxpayers who may not qualify are those with unique situations such as Roth IRA conversions, individuals claiming a disaster loss or military-related extension, and those who need to make certain state adjustments to federal itemized deductions. Also, taxpayers must use original, not substituted or corrected W-2s. A complete list of exceptions is available on the Franchise Tax Board’s website.
Tips for Using CalFile
- Thoroughly review the qualification criteria and exceptions. There are many exceptions to qualification; fortunately, there are other free state filing programs available to those who do not qualify to use CalFile.
- Know what last name was used on the most recently filed return. The CalFile system looks up taxpayer information by searching for a last name as it appeared on a 2006 tax return. A taxpayer whose name changed since filing a 2006 tax return must access the system using their old name, then update their last name within CalFile upon log in. Those who have never filed a California tax return must call the Taxpayer Services Center.
- Set aside enough time to complete the return in one sitting. The CalFile program allows a maximum of twenty minutes per webpage, so individuals may not be able to walk away and finish later. Fortunately, the California Franchise Tax Board claims that individuals with straightforward returns should be able to complete their returns in approximately 15 minutes, assuming they have all tax information on hand.
Taxpayers with adjusted gross incomes under certain thresholds may qualify for free federal tax return e-filing as well.
Furthermore, anyone who doesn’t qualify for free state tax return filing through CalFile may have luck finding free state return filing through an IRS Free File provider.
Source: State of California Franchise Tax Board Website
