Direct, Internet Filing Option Provides Free e-file for Many Californians
The Franchise Tax Board today approved the state's
NetFile program, a free, direct, Internet tax-filing alternative for the
upcoming 2004 tax-filing season.
At its scheduled meeting, the three-member Franchise Tax Board approved
a motion by State Controller and FTB Chair Steve Westly to offer NetFile
with a two-year moratorium on future enhancements in exchange for the
tax software industry's continued free e-file offerings in California.
In what he called a "common-sense compromise" with industry,
Controller Westly said the NetFile program currently offered by FTB "saves
the state money and makes it as easy as possible for Californians to file
their taxes online at the lowest possible cost."
"The FTB staff needs to shift their work from developing new offerings
to enhancing the security of current offerings," Westly said. "The
FTB should work to ensure that more Californians realize the benefits
and savings of electronic filing."
More than six million of the state's 14 million tax returns can
be e-filed for free using NetFile. The qualifications include all filing
statuses with income up to $271,000. NetFile allows many income sources
beyond W-2 wages such as interest, dividends, alimony, and IRA distributions.
Taxpayers claiming the Renter's Credit and Child and Dependent Care
Credit qualify. Taxpayers who itemize their deductions can use it as well
as taxpayers claiming the senior or blind exemption credit.
The FTB first offered free e-filing in September 2002 for the 540 2EZ.
For the 2003 filing season, we expanded the service to include 540A and
some 540 filers. To date more than 13,000 NetFile returns have been e-filed.
Westly said he hopes many taxpayers will choose to send their returns
electronically to save the state from costly manual processing. The NetFile
service performs math calculations, tax table look-up functions, and checks
for simple processing errors. The benefits of using e-file are quick refunds
within seven days; accurate return preparation; it's paperless,
and acknowledgement that the FTB received the return.