Best Free Tax Software 2021 [File Your Taxes For Free]

free tax software

I recently received a call from a friend who was irate because a tax software company wanted to charge her over $100 to file her taxes. She only had W-2 income and thought she’d qualify for the free tier. 

But it turned out that a combination of HSA contributions, dependent care credits, and student loan interest pushed her up to the paid tier. She felt ripped off and wanted her time back.

Unfortunately, her situation is all too common during tax time. A lot of online filing companies advertise free filing. Many are even part of the FreeFile Alliance which is a group of companies that have committed to offering free filing for eligible individuals.

However, users may not qualify for the free offer because of the complexity of their filing. By the time users spend an hour or two entering information they may end up paying top dollar to file their taxes.

Instead of being surprised by the price tags of “Free” filing offers, we want you to be an informed consumer. We took a look at every major tax filing software and broke down who is offering free filing and who isn’t. Many of these companies offer free federal returns for certain filers but charge for state returns. Or, even worse, some charge more for a state return than other versions of their software!

In 2021, H&R Block Free Online Tax Filing and Credit Karma Tax offer the most robust free file options. But even these companies have some limits. Before you select a “Free” software package, check out our list of the best free software to see if it makes sense for you

Free Tax Software? Companies Can “Get You” Even With Free Software Offers

Most of the companies on this list offer Free Federal filing for a subset of taxpayers. The trouble is that each company has different criteria for free filing. Some only offer free filing for a small subset of filers (usually those with W-2 income only, and no credits or deductions). Other companies offer free Federal filing but require payment for state filing.

The most frustrating “gotchas” tend to be related to student loan interest deductions, retirement contributions, daycare expenses, and HSA contributions. Almost every major filing service requires an upgrade to the “Deluxe” tier when you start claiming these credits. This can feel like a super-frustrating money grab when you don’t know you have to pay until you’re an hour into the process and about to finish filing.

Consider yourself warned. Very few tax software services offer free filing when you have complex filing. This isn’t to say that all tax software is a bad deal. On the contrary, many tax software packages are a real bargain. But when you see a tax software company plastering Free on its website, be wary. You may not qualify.

Another gotcha relates to state filing costs. Most people have to file federal and state returns. Some companies offer free federal filing, but always require users to pay for state filing fees. Often the state filing costs are hidden on the website. So be careful before you choose a company that advertises Free Federal filing.

Which Companies Offer Free Federal and Free eFile State Tax Returns?

In 2021, the only company offering free state and Federal filing for ALL users is is Credit Karma Tax. Credit Karma Tax offers a surprisingly robust user experience, audit support guarantees, and support for most major tax situations. If you’re a bargainer, Credit Karma Tax is a great bet. Check out Credit Karma Tax here >>

This year, H&R Block is also offering a robust free pricing tier. If you earned W-2 income or received unemployment income, you could qualify for this tier. The free tier also supports student loan interest deductions, educational credits, and child tax credits. The few gotchas here are related to retirement credits, HSA contributions, and child or dependent care contributions. All of these normal situations require an upgrade to the Deluxe tier. Check out H&R Block Online here.

We’re huge fans of H&R Block’s expanded free pricing and Credit Karma’s completely free offerings. However, a free product may not be the best fit for you in 2021. Individuals with complex filing situations may want to choose bargain software like TaxHawk. Or they may opt for top tier usability from more expensive software like H&R Block (the upgraded tiers) or TurboTax. This article focuses on free software, but consider your situation before making a selection.

Note For Last Minute Filers: Most state free filing options disappear after April 1st. Choosing a platform early on generally means you’ll get the best deal. File early next year to take advantage!

Note: The tax prep offers that appear on this site are from companies from which The College Investor receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The College Investor does not include all tax prep companies or all tax prep offers available in the marketplace, although we are always striving to keep our content updated.

List Of Free Tax Software Companies

Watch Out For These “Gotchas”

Unemployment income, student loan interest, educational expenses, and Child Tax Credit included for free.

Watch out if you have to claim an HSA contribution (even if it’s reported on a W-2) or if you have child care expenses. People who may qualify for the Retirement Saver’s Credit also have to upgrade.

Read our H&R Block Review.

Unemployment income and dependent credit included for free.

Watch out if you have student loan interest, if you need to claim an HSA contribution (even if it’s reported on a W-2) or if you have child care expenses (among other gotchas).

Read our TurboTax Review.

Child Tax Credit included in the free tier.

Watch out if you have unemployment income, student loan interest, child or dependent care expenses, or HSA contributions. Free for W2 and no dependents. 

Read our TaxAct Review.

100% Free. However, some very complicated situations aren’t covered.

See our Credit Karma Tax Review here.

State is $12.95 additional.

Read our FreeTaxUSA Review.

“Free to Start”, not to file. They charge a $19.95 e-File fee. Read the 1040Now review.

“Try it free” but everyone pays the $25 price tag.

Check out the review.

Only Free for very simple returns.


Watch out if you have over $100,000 in income, need to claim a dependent or have interest income in excess of $1,500. HSA contributors, student loan interest, and other common deductions and credits are also excluded.

State is always $19.95.

Read our review.

Free Federal for certain income levels (up to $72,000 for people under age 65). State file only free for IA, ID, ND, VT.

All others must pay for state filing.

State is $9.95 additional.

Read our OLT Review here.

State is $12.95 additional. This is the same company as FreeTaxUSA.

Read the TaxHawk Review here.

Free for simple tax returns including student loan interest and educational expenses.

People with dependents, HSA contributions, IRA contributions, and other situations will need to upgrade.

Read our Tax Slayer Review.


This year, TaxAct is starting to treat its free filers like real customers. Free filers can import prior returns and access tech support for questions.

On top of those additions, TaxAct has expanded its definition of free. TaxAct provides free filing to people with W-2 income, education expenses (but not student loan interest), and people who want to claim the child tax deduction. The free filing includes federal and state returns.

But watch out. TaxAct bumps you out of the free zone pretty quickly. Anyone with student loan interest, charitable contributions, child care expenses, or contributions to a traditional IRA will move to the Deluxe tier.

You can read more about what TaxAct offers in our TaxAct Review.

TaxAct Logo


In 2021, TurboTax is allowing some users to file state and federal returns for free. And if you qualify, it has an amazing offer. Those who qualify can have their state and Federal returns looked over by an enrolled agent.

Unfortunately, this offer is limited to people with very simple returns. TurboTax supports free Federal and State filing for people with W-2 or unemployment income. It also supports the Child Tax Credit and Earned Income Tax Credit (EITC) on this tier.

However, anyone with more complexity won’t qualify for free filing. That includes anyone with HSA contributions, anyone who wants to claim the Saver’s Credit, and those with student loan interest.

You can read more about what TurboTax offers in our TurboTax review.

TurboTax Logo

H&R Block

H&R Block offers a free federal and state return this year. They also expanded what counts for free filing, making them our top choice for individuals that qualify for free file.

W-2 wage earners (including homeowners, people claiming childcare expenses, student loan interest deduction or charitable deductions and recipients of the earned income tax credit) can all get free file this year.

You can read more about what H&R Block offers in our H&R Block Review.

HR Block Logo

Credit Karma Tax

Before the start of the 2021 filing season, Credit Karma sold Credit Karma Tax to another party. However, we’re excited to see that it’s still promising free state and federal filing for all users.

While the company has had a few software glitches in the past, 2020 proved to be a solid year for the platform. Assuming that the technical underpinnings remained constant, Credit Karma Tax will offer a great free product for most filers. Those who worked in multiple states and those with K-1 forms will be disqualified.

We’ll update more as soon as they open it up. Learn more about Credit Karma Tax here.

Credit Karma Logo


FreeTaxUSA advertises itself as the best place to file your taxes for free. The slogan is “Do it Right. Do it free.” Unfortunately, the platform isn’t free. All users must pay a $12.95 fee to file a state return.

That’s not to say that I hate FreeTaxUSA. In reality, I think FreeTaxUSA and its companion site (TaxHawk) is a great bargain solution for people with complex tax filing situations. The state pricing is transparently displayed on the front page of the website. However, FreeTaxUSA isn’t free. You will always have to pay for state filing.

Check out our FreeTaxUSA review here.

FreeTaxUSA updated logo

Beyond having the second ugliest website of all tax preparation companies, their pricing is exceptionally confusing. Their site says free online tax preparation. But none of their filing options are free.

1040 Now Advertising

They clearly charge $19.95 – there’s no free! So why do they start by saying free online tax preparation? I could not find offers for free filing for lower earners either.

Starting for free isn’t free. This is software to avoid.

Unlike many other filing services, has a flat pricing model. All in, you’ll pay $25 to file your taxes. It doesn’t matter whether you’ve got complex taxes or easy taxes, the price is the same. has a unique pricing proposition, but the service isn’t free. You can start the filing process for free. But you’ll need to pay before you file.

Check out our review here.

ezTaxReturn only supports free Federal filing for a limited subset of people. You must earn less than $100,000, not have dependents and only earn W-2 income. If you adjust your income through credits or deductions you cannot use their services.

ezTaxReturn has made their prices very transparent this year, and we appreciate that. They offer a limited free file option for both Federal and state. Since the free version is limited, and the website isn’t great, we recommend skipping ezTaxReturn this year.

Everyone who uses ezTaxReturn has to pay for state filing in 2021.

Check out our ezTaxReturn review here.


FileYourTaxes is tough to use and its price structure is byzantine. To qualify for free federal filing you must earn W-2 income, be under age 65, have no dependents, and earn between $9,500 and $72,000. 

Free state filing is limited to Iowa, Idaho, North Dakota, and Vermont. All others need to pay for state filing. This site is not one we recommend, even if you manage to qualify for free filing.

eSmart Tax

eSmart Tax is another company that offers free Federal returns, but charges $29.95 for state returns. Make sure you read all the way through, because their free is also pretty limited.

We’re also disappointed by that incredibly high price point for state tax returns.

Check out our full eSmartTax review here.

OnLine Taxes (OLT) is another online tax software company that hypes up “Free Federal Return For Everyone” because they charge additional for the state return.

The $9.95 state return is fairly inexpensive, but this software is a pain to use. Despite the free federal filing, and the low price for state filing, we recommend staying away.

Check out our review here.

Tax Hawk

TaxHawk advertises “File Federal Taxes Free!” which turns out to be true. People who need to file state returns will need to pay $12.95. TaxHawk does not have a free pricing tier for state filing.

With cleaned up advertising and great software, TaxHawk qualifies as a great bargain. But those who need to file State Returns can’t file for free with TaxHawk. 

Read our full TaxHawk review here.

Tax Slayer

TaxSlayer is open and honest about only supporting simple returns on its free tier. While it doesn’t support Child Tax Credits or HSA contributions on its free tier, it does support student loan interest deductions. 

If you qualify, TaxSlayer will file state and Federal taxes for free. While the 2021 “Free Tax” service from TaxSlayer is limited, the platform is also a bargain at some of the higher price points.

You can read our full TaxSlayer Review here.

Frequently Asked Questions

Is there such a thing as free tax software?

Several companies offer free tax software to some customers. Unfortunately, most companies restrict who can file for free. In 2021, only Credit Karma Tax is free for all customers. However, H&R Block Free has a more comprehensive version of free filing.

Does free filing have restrictions?

Most companies restrict who qualifies for free filing. These companies need to make money, so they require some users to upgrade. Paying for tax software could be a worthwhile expense for you, but you should choose that in advance. Don’t get stuck paying top price after an hour or two of entering financial information.

Are federal and state tax returns free?

The FreeFile Alliance focuses on free federal filing. However, several companies offer free federal and state filing for a subset of customers. For example, TurboTax, H&R Block, TaxSlayer, TaxAct, and Credit Karma Tax offer both federal and state filing for free.

Which tax software is free?

Credit Karma Tax and H&R Block Free are the most robust free file options. Beyond that, TurboTax, TaxSlayer, Tax Act, FreeTaxUSA, and more all offer free file.

Final Reminder About Free Tax Filing

The world of Free Tax Filing is full of gotchas. Use the guide above to help you choose the right software for your situation.

And remember, free filing may not be the right move for you. Many people prefer to use expensive tax filing software because it helps them feel confident about their filing. You don’t want to be “Penny Wise and Pound Foolish” when it comes to an expense as large as your taxes. Free software sounds great. But don’t go for free if it means missing out on big tax deductions.

If you want to estimate your taxes without “Starting For Free”, consider using a tax estimator – those are almost always free.

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