The tax software industry just got its own “360 Antivirus.” Credit Karma, the site that has long offered free credit reports, will start offering free tax filing in 2017. To save you from reading all the way to the end only to be disappointed, here’s the key point up front: most F1/J1 students are Non-Resident Aliens for tax purposes, so they cannot use Credit Karma’s free tax filing service. To determine your residency status, please refer to the tax residency test in this article. For most people who are Resident Aliens for tax purposes and for U.S. citizens, with a few exceptions, CK’s free service can be used to file both state and federal taxes.

Free Tax Filing

If you are not a nonresident (see this article; most H1 holders and green card holders are tax residents), you can now go to Credit Karma Tax and click the "Reserve My Spot" button to claim a spot in advance. Whether or not you end up needing it, reserving a spot can’t hurt. Tax filing is completely free, including both federal and state returns.

What’s Covered

Credit Karma’s tax filing service supports Forms 1040, 1040A, and 1040EZ. It offers e-filing, and it also allows you to print the forms yourself and mail in your return. However, you cannot use it if any of the following applies:

  • You need to file state taxes for multiple states, or you need to file a nonresident state return for a particular state;
  • You want to file only a state return, but not a federal return;
  • You need a federal nonresident return (Form 1040NR or 1040NR-EZ);
  • You need to claim the Foreign earned income credit (for foreign income) or the Non-dependent earned income credit (for divorced parents who do not have custody);
  • You are filing separately under a common-law marriage arrangement (Married filing separately); or
  • You have trust income reported on a K1 tax form.

For a complete list of supported tax forms, see this list.

How Does Credit Karma Make Money?

Credit Karma says that through its free tax filing service, Credit Karma Tax, it can attract more users to creditkarma.com and profit from users’ activity on the site.

Will Credit Karma Use Your Tax Data for Other Purposes?

At the moment, Credit Karma’s website does not say whether it will use tax filing data for purposes other than tax filing. Unless Credit Karma Tax obtains the user’s permission in advance, tax return data cannot be used for activities unrelated to tax preparation under Treas. Reg. §301.7216—for example, to decide which credit card ads to show on creditkarma.com or for other Credit Karma promotional activities. Therefore, we believe there is no need to worry too much about personal privacy here.
As tax season approaches, we will try to provide more tax-related information. We also recommend that everyone go ahead and reserve a spot with Credit Karma Tax first.