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Credit Karma Tax has become Cash App Taxes, but Credit Karma isn’t out of the tax game.
The company now offers tax filing through TurboTax—another product provided by Credit Karma’s current parent company, Intuit.
TurboTax is one of the easiest to use tax software platforms, but it often charges a fee to file your taxes—unlike Credit Karma Tax, which was completely free for all users. In some cases, you may not be able to file your taxes through Credit Karma at all.
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What Happened to Credit Karma Tax?
At the end of 2020, Credit Karma sold its free do-it-yourself tax preparation platform, Credit Karma Tax, to Square, Inc. The sale was part of a proposed settlement with the U.S. Justice Department after it filed a civil antitrust lawsuit to block Intuit’s acquisition of Credit Karma.
Square announced it would integrate Credit Karma Tax into its Cash App platform. Previous CKT users are now able to access prior year returns and file their taxes via Cash App Taxes.
Credit Karma’s Partnership With TurboTax
Credit Karma’s DIY tax software used to compete with TurboTax. But now that the two operate under the same Intuit umbrella, they’re providing integrated services to Credit Karma members in the U.S.
Members can file their taxes with an embedded TurboTax product that has the same look and feel as TurboTax but is housed within the Credit Karma platform. It provides users with ongoing insights into their finances, income, and taxes—and an estimate of their tax refund.
In some cases, Credit Karma members are able to file their taxes from start to finish for free*.
Who Can File Their Taxes for Free With Credit Karma?
Credit Karma members have two paths for filing their taxes. Members who filed with CKT in the past can use Cash App Taxes. New filers and those who used an alternative tax filing option in the past can start the tax filing process with TurboTax in the Credit Karma platform.
Poulomi Damany, general manager of assets and tax at Credit Karma, says while the company aims to provide free tax filing to as many members as possible, it’s an option not available in all tax situations.
“Many members with simple returns, meaning those only filing Form 1040, will be able to enjoy free tax filing with TurboTax within the Credit Karma app from start to finish,” Damany said, “while others may only be eligible for certain offers and discounts.”
According to the TurboTax website, some situations not eligible for free filing with TurboTax* include:
- Itemized deductions
- Unemployment compensation reported on a 1099-G
- Business or 1099-NEC income
- Stock sales
- Rental property income
- Credits, deductions, and income reported on Schedules 1-3
Those eligible for TurboTax free filing* can file both federal and state income tax returns at no cost.
Some filers may receive part of a tax refund in as little as one hour of the IRS accepting their return by taking advantage of the TurboTax Refund Advance loan program.
It allows eligible users to get up to $4,000 of their expected federal income tax refund in the form of a loan that’s automatically paid back once the IRS processes their refunds.
While the loans come with no fees and no interest, they’re not without risks. If your refund is denied or lower than expected, you could face interest and fees if you’re not able to repay the loan right away out of your own pocket.
Advantages of the Credit Karma/TurboTax Partnership
For Credit Karma members who may have used TurboTax (or an alternative tax filing method) in the past, there are several potential advantages to filing their tax return with Credit Karma, including:
- Seamless tax filing experience
- Potentially faster access to refunds with direct deposit into a Credit Karma Money Spend online checking account or a TurboTax Refund Advance loan
- Deeper insights into their income, effective tax rates, estimated tax refunds, and other aspects of their finances throughout the year
- Potentially free tax filing for simple returns
- Access to special offers on TurboTax for those who don’t qualify for free filing
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What Happens if You Don’t Qualify for Free Tax Filing?
Credit Karma members who don’t qualify for free tax filing via TurboTax on Credit Karma’s platform will be notified and moved over to TurboTax to complete their return and pay the fee.
Damany says the cost of filing depends on the user’s tax situation and the package they select. As of late April 2023, TurboTax prices ranged from $69 for the Deluxe package to $129 for TurboTax Self-Employed, with state returns costing an additional $59 each. You need to file early in the tax season to take advantage of the less expensive prices, because in prior years TurboTax has raised rates in late February or early March.
Users can also opt to have a TurboTax Live expert provide advice, perform a final review, or prepare their tax return from start to finish for an additional fee.
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