Credit Karma Tax Review: Free Option for Simple Taxes

Weigh the features of this Credit Karma free tax service.

Credit Karma Tax is a free, online tax preparation and filing service that launched in 2016. As a newcomer to the online tax preparation industry, Credit Karma Tax allows you to try its services by importing last year’s return from similar products like TurboTax, H&R Block and TaxAct.

If you’re looking to save money on filing your taxes, find out if this Credit Karma free tax resource is the right tax preparation and filing service for you.

Credit Karma Tax at a Glance
Cost to File Federal Taxes$0
Cost to File State Taxes$0
Supported FormsMore than 90, including Form 1040, Form 1040A and Form 1040EZ
Special FeaturesEarlybird Advance of $500 to $1,000 as soon as 24 hours after IRS accepts return
Max Refund Guarantee
Filing LimitationsDoesn’t support part-year state returns, multiple state returns, nonresident state returns or foreign earned income
Doesn’t support other common forms like Form 1040NR
Cannot file state taxes without filing federal taxes
Information is accurate as of Aug. 10, 2018.

Credit Karma Tax Review

Credit Karma Tax offers customized checklists, easy W-2 uploads, error checks and user support. Credit Karma mobile functionality also rolled out for most users in 2018.

It’s free to file your Credit Karma Tax federal and state returns. Though products like H&R Block and TaxAct can file your federal taxes for $0, they all charge additional fees for state filings. The Credit Karma Tax state version doesn’t cost extra, which gives it an advantage over competitors.

However, as an online-only service, Credit Karma Tax doesn’t offer office appointments like H&R Block does to customers who want in-person help  Credit Karma Tax’s Max Refund Guarantee also loses out to TaxAct’s $100K Accuracy Guarantee, which will refund software, pay refund or tax liability differences and cover audit costs up to $100,000 if its program isn’t accurate. And, for customers who rely on product reviews, TurboTax is more highly rated and trusted.

Advantages of Credit Karma Tax

Credit Karma Tax costs are minimal — $0, to be exact — and the service is comparable to other online tax preparation resources. Here are more of the benefits of using Credit Karma Tax to file:

  • File federal and state taxes for free.
  • Receive part of your refund as early as January with the Earlybird Advance feature.
  • Accepted Max Refund Guarantee claims yield a $25 gift card.

Joanne of Morada, Calif., wrote on the review website ConsumerAffairs in April 2018, “I did a trial on TurboTax and then went to Credit Karma to make sure it came up with the same numbers as TurboTax, and it did so I knew that Credit Karma was correct . . . I am using them again this year.”

Credit Karma Tax also launched a unique feature in 2018: the Earlybird Advance, which gives customers $500 to $1000 without any interest or fees as soon as 24 hours after their tax returns are accepted by the IRS. It promises the maximum refund possible through its Max Refund Guarantee; if you use another online tax preparation service to file your federal taxes and receive a larger return, you might be eligible for a $25 gift card.

Watch Out: 12 Tax-Filing Mistakes First-Timers Always Make

Disadvantages of Credit Karma Tax

As a relatively new service, Credit Karma Tax doesn’t support certain tax forms and situations that other products might. Here are some of the drawbacks to filing via Credit Karma Tax:

  • Users must register for a Credit Karma account due to a single sign-on system.
  • Program doesn’t support situations like part-year state filing or multiple state filing.
  • Users might encounter inconsistent customer support.

Based on consumer reviews, the customer support isn’t as robust, either. Donald of New Bern, N.C., wrote on ConsumerAffairs in March 2018, “Trying to use their chat help was a nightmare. … The support team was unable to answer my questions or didn’t answer the question asked.”

Note that you’ll need to register for an account under Credit Karma Tax’s parent company before you can start filing your taxes.

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Credit Karma Tax: Free, but Lacking in Support

Budget-minded people who are looking for cheaper tax preparation services could consider trying Credit Karma Tax, which will file both federal and state taxes for free. The service might also be convenient for those who already have a Credit Karma account. Otherwise, customers who think they might need professional help filing taxes should consider more established tax preparation services or other avenues.

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This content is not provided by the companies mentioned. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone and have not been reviewed, approved or otherwise endorsed by Credit Karma Tax.