South Carolinians can get taxes done for free

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February 14, 2008

COLUMBIA, S.C.---South Carolina has joined the Free File Alliance, which allows resident taxpayers to electronically prepare and file their federal and state taxes for free if they make $30,000 a year or less.

Georgia already participates in the program.

A full news release from the South Carolina Department of Revenue follows.

SC Joins Free File Alliance

The South Carolina Department of Revenue has joined 20 other states as a member of the Free File Alliance and now allows eligible SC taxpayers to electronically prepare and file both their federal and South Carolina returns for free. The free electronic filing and tax preparation initiative is offered through a public-private partnership between SC DOR and private-sector software companies.

Good News for SC Taxpayers

At least 50 percent of SC taxpayers are eligible to participate in the Free File program by meeting the income threshold of $30,000 or less--an amount that is higher than the SC per capita income. In addition, eligibility requirements for free file status exist for taxpayers 65 or older as well as for students. Taxpayers can choose from four tax preparation software companies.

Free File allows qualified taxpayers to prepare and file federal and state returns at the same time with no cost or hidden fees. Taxpayers filing electronically may receive a faster refund and, when choosing direct deposit, refunds can be received in as little as 10 days from the date of filing.

Taxpayers also benefit from Free File's automatic check for accuracy. The participating software vendors constantly update their programs providing up-to-date information to accurately complete returns. Free File is user-friendly, completely paperless, safe and secure. Tax return information is protected through encryption. Companies offering the Free File program must secure third-party privacy and security certification, as well as comply with all federal rules and regulations on taxpayer privacy.

"We encourage SC taxpayers to investigate the Free File option since eligible taxpayers get not only a high- quality and very secure tax preparation software but also they get it for free," said Ray Stevens, Director of the South Carolina Department of Revenue.

If taxpayers find that they do not qualify for free filing of both the federal and South Carolina returns, they can visit the Fed/State Online filing page on DOR's website for both discounted and standard priced online filing products from a number of providers.

Why discontinue SCnetFile?

SCnetFile is still available for filing extensions using form SC4868. However, SCnetFile is no longer available for filing of SC returns. The Free File Alliance program provides a superior service to SCnetFile since SCnetFile did not allow taxpayers to file their federal return through the program. In addition, taxpayers' use of the program steadily declined. Out of over 2 million returns filed with SC, SCnetFile's peak usage reached only 32,400 returns and even that modest number had receded to 28,800 returns for the 2006 tax year.

"SCnetFile, while it certainly served its purpose at the outset, is simply no longer able to meet the needs of our citizens. We wanted to offer taxpayers a quality, up-to-date, user-friendly medium for electronically filing their tax returns," said Stevens. "Free File does that and does it while allowing our taxpayers to file both their federal and state returns."

Free File Alliance

The Free File program is operated by SC DOR and the Free File Alliance. The Alliance is a consortium of tax preparation software companies. Each company sets its own criteria for who can use the service. The Free File Alliance selects its own membership, and all members must meet federal and state standards for security and privacy. SC DOR does not endorse any individual Free File Alliance company.

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