You’re sitting at your kitchen table, a stack of W-2s and 1099s staring you down. You remember the commercials. You know the ones—where the word "free" is repeated so many times it starts to sound like a glitch in the Matrix. But then you get to the end of the process, and suddenly, TurboTax is asking for $60, $100, or even more.
Wait. Why is TurboTax no longer free? Honestly, the answer is a messy mix of corporate lobbying, a massive legal smackdown from the Federal Trade Commission (FTC), and a strategic exit from government partnerships. It isn't just one thing. It's a decade-long game of cat and mouse between the software giants and the people trying to make taxes actually affordable.
The $141 Million "Free" Problem
For years, TurboTax used a marketing campaign called "Absolute Zero." It promised $0 federal and $0 state filing. It sounded great. Too great, apparently.
In early 2024, the FTC dropped the hammer. They issued a final order that basically told Intuit (the company that owns TurboTax) to stop lying. The commission found that Intuit engaged in "deceptive advertising" by telling people they could file for free when, in reality, about two-thirds of taxpayers didn't qualify.
If you had a 1099 from a side gig, unemployment income, or even certain student loan interest deductions, the "free" door slammed shut.
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Intuit actually had to pay out $141 million in restitution to millions of customers who were tricked into paying. If you got a random check for $30 in the mail a couple of years ago, that was likely your "I got tricked by TurboTax" settlement money.
Intuit Broke Up With the IRS
There used to be a thing called the IRS Free File program. It was a deal where big tax companies would offer truly free software to lower-income Americans in exchange for the IRS promising not to build its own free tax-filing software.
In 2021, Intuit walked away.
They claimed the program had too many "limitations." But critics, including groups like ProPublica, pointed out that TurboTax had been caught using "noindex" code to hide their truly free IRS page from Google search results. Basically, they wanted people to find their commercial free version (the one with the traps) instead of the government free version (the one that actually worked).
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By leaving the program, TurboTax no longer has to follow the IRS's strict rules about who gets to file for free. Now, they set the rules. And their rules? They're designed to get you to hit a "paywall" the second your tax situation gets even slightly interesting.
The Death of IRS Direct File
For a brief moment in 2024 and 2025, there was hope. The IRS launched a pilot program called Direct File.
It was a government-run, totally free service that let you file directly with the IRS. No upsells. No "Deluxe" packages. No "Max Defend" add-ons. People loved it. According to the General Services Administration, about 90% of users rated it as excellent.
But as of the 2026 tax season, Direct File is dead.
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The program was axed following the "Big Beautiful Bill" passed in late 2025. Critics of the program—heavily backed by lobbying from Intuit and H&R Block—argued it was too expensive and that the "private sector can do a better job." With Direct File gone, the competition that was forcing TurboTax to keep its prices (somewhat) in check has vanished.
Why you're seeing a charge this year:
- The "Simple Return" Trap: TurboTax defines a "simple" return as only a Form 1040. If you have a Schedule C (freelance), Schedule D (stocks/crypto), or even itemized deductions, you're immediately disqualified from the free version.
- The State Return Fee: Sometimes the federal part is free, but they'll hit you with a $40-$60 fee just to send your data to your state's revenue department.
- Refund Processing Fees: If you choose to pay your TurboTax fees out of your refund instead of with a credit card, they often tack on a "processing fee" (sometimes around $40). It’s a fee for the privilege of paying a fee.
Is Anything Actually Free Anymore?
If you're frustrated that TurboTax is no longer free for your specific situation, you aren't stuck. You just have to look where the big marketing budgets aren't.
FreeTaxUSA is the fan favorite right now. It's not the prettiest website, but federal is always free, even for complex stuff like rental properties or K-1s. State is usually about $15.
Cash App Taxes (formerly Credit Karma Tax) is another one. It’s actually 100% free for both federal and state, though they’ll try to get you to sign up for their banking app.
Then there's the IRS Free File website. If your adjusted gross income (AGI) is $89,000 or less (for 2026), you can still access free software from other providers like TaxSlayer or ezTaxReturn. You just have to go through the IRS.gov portal first. If you go straight to the company's website, they’ll charge you.
Your Next Steps
- Check your AGI. If you made less than $89,000, go to IRS.gov/FreeFile. Do not go to TurboTax.com.
- Look at your forms. If you have a 1099-NEC or 1099-K, accept that TurboTax will charge you. Switch to FreeTaxUSA or Cash App Taxes to save $100+ immediately.
- Avoid the "Refund Pay" option. If you do use a paid service, pay the fee upfront with a debit or credit card to avoid the "refund processing" junk fee.
- Enlisted Military? You actually still get TurboTax for free. Intuit offers free federal and state filing for active-duty and reserve enlisted members through a specific military landing page.
The era of "Free, Free, Free" is over, but that doesn't mean you have to open your wallet. It just means the "easy" button now comes with a subscription fee.