Chime, an online fintech company, just launched free federal and state tax filing software through its mobile app, the latest in a growing list of fintech companies to do so.
The company has partnered with Column Tax and April, two registered IRS e-file providers, to make its in-app tax filing available as part of a year-long pilot program. Eligible customers will receive in-app notifications to access Chime’s new tax offering.
Chime intends to roll out its tax software to all customers in 2025. For now, access to the tax software is based on state availability provided by Column Tax and April, the company said in an email.
With its foray into online tax filing, Chime joins a growing list of companies offering free tax prep services, including online banks Current and Varo as well as Cash App. Varo and Current launched tax prep software for customers in January, also with Column Tax. Cash App Taxes, meanwhile, has offered free tax preparation services since October 2021.
How does Chime in-app tax filing work?
Chime’s tax filing software covers a majority of its members’ tax situations, but it doesn’t let you file multiple state returns, according to the company. If you’re a business owner with a partnership and need to file a K1 form on your personal taxes, you should also look elsewhere.
Since I don’t have a Chime account, I couldn’t test the new software, but confirmed you have to download the Chime app to file your taxes. Tax filing on Chime isn’t available on desktop. Chime claims it takes “minutes” to file, but we recommend blocking out at least an hour before sitting down to file your taxes, especially if you have a complicated return.
As is standard practice across online tax software, Chime offers both a tax accuracy and max refund guarantee if you use its services. If the software makes a mathematical error, you will be reimbursed up to $10,000 by April and Column Tax for any penalties or interest charged by the IRS. And if you get a larger return (or smaller liability) from another tax software, you can be reimbursed up to $250 and amend your tax return for no charge.
Chime is also offering taxpayers the opportunity to receive their tax refund up to six days early if they opt to deposit money into their Chime bank account, even if they don’t use Chime’s filing service.
How to choose the right free tax filing option for you?
There are a lot of free filing options available in 2024. Most accommodate taxpayers with simple returns (a W-2 and some basic credits to claim). A select few like H&R Block offer additional schedules and forms such as unemployment compensation (1099-G). Others, namely Cash App Taxes and FreeTaxUSA (for federal filing only), have very little tax situation limitations.
The IRS also has a few programs taxpayers can take advantage of, albeit with their own set of conditions. The agency partners with eight online tax software companies to offer free filing through IRS FreeFile. You may qualify for this if you made less than $79,000 last year.
This year, the IRS also launched Direct File, a new proprietary tax filing option, available in 12 states.
No two tax filing options are the same. So it’s important to compare your tax situation with the forms and schedules accepted by different online tax services if you are keen on filing for free this year. You should also be wary of tax services that lure you in with their free tier and try to convince you to upgrade to a paid product.
Online tax software also varies in the amount of help and support offered to you. While TurboTax sets the industry standard for guiding users through the tax filing process, free and low-cost options like Cash App Taxes and Jackson Hewitt do not provide much assistance as you file your taxes yourself.
Finally, all online tax software will offer you multiple ways to receive your tax refund. The most common methods are direct deposit, a paper check in the mail, or a prepaid debit card with a partnering bank. If you want your refund faster, experts recommend opting for direct deposit.
