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Credit Karma Tax 2020 review: No-frills free tax filing

Credit Karma Tax 2020 lets anyone file free federal and state returns. But the service continues to lack strong guidance.

Credit Karma Tax 2020 review
(Image: © Credit Karma)

Our Verdict

Credit Karma Tax 2020 remains a reasonable free option for filing federal and state taxes. It appeals to those enticed by the word free, and can handle a surprising variety of tax situations, but H&R Block and TurboTax offer vastly more support.

For

  • Mobile-friendly filing
  • Free to file both federal and state taxes, even for self-employed

Against

  • No tax expert option
  • Minimal online support and guidance
  • Interface lacks refinement

Credit Karma Tax remains free, and a contender for best tax software. However, it falls short of paid competitors, some of which charge nominal fees to get a greater breadth of support.

The five-year-old service continues to leverage personal information provided to personal finance site Credit Karma, but that’s where the connection to Credit Karma now ends. Credit Karma was acquired in 2020 by Intuit, which in turn sold off the Credit Karma Tax business unit to Square since it already had the behemoth of the do-it-yourself tax services, TurboTax. Since Square’s acquisition of Credit Karma Tax is so recent, it comes as little surprise that the only new element for this year is the service’s links to Square’s Cash App.

While Square didn’t share any information with us for this review, we expect to see Credit Karma Tax to evolve under its ownership and become part of Square’s ecosystem.

Credit Karma Tax review: Cost

Credit Karma Tax is free to use, and free to file most any federal return. This year, you still pay in the form of trading your information to Credit Karma, which you still need to sign up for even though it is now owned by Square. Not every scenario is covered (for example, the service targets single-state residency returns and lacks support for several scenarios, such as estates and trusts), but it is completely free.

Credit Karma Tax 2020 review: State filing

As with your federal return, state tax filing is free for one state with Credit Karma. Most competitors charge between $32 and $50 per state, though the free tiers at H&R Block, TaxSlayer, and TurboTax include free state returns.

Credit Karma Tax 2020 review: Features

No upgrades, no upsells, no hidden costs with Credit Karma Tax. Even gig workers with Schedule C deductions and self-employed or freelance income can file without paying extra.  So too can S-corporations and partnerships. However, the service can't handle estates and trusts, and it can't handle part-year or nonresident returns.

Credit Karma Tax 2020 review

(Image credit: Tom's Guide)

When you’re done with your return, you can export a PDF copy of your taxes for your offline records.

New for this year: The service prompts you to link to a Cash App account, which is Square’s personal finance app that supports money transfers and investments.

Credit Karma Tax 2021 review: Available help

One of the big trade-offs to Credit Karma tax is the lack of cohesive, meaningful support. There’s no phone support, just email and 12 hours of chat support. Likewise, with no upgrades available, that means no help from tax experts, as found in the other four services in our best tax software buying guide.

Credit Karma’s help interface has been cleaned up since we last looked at the service. A help button is present in the top-right of the screen navigation bar. Tap it to reveal frequently asked questions in a pop-up pane at right. When there is help, it can be useful; however, Credit Karma Tax lacks the depth and clarity of competing services. You can only search help in the tax home dashboard, and many of the hits are simply entries on the website as opposed to entries within the service itself.

Credit Karma Tax 2020 review: Ease of use

Once we signed up for Credit Karma and selected the tax product, we could begin navigating the return, starting with basic personal info -- which you have to enter before you can tackle the rest of the return. All the typical tax service questions, albeit in a slightly different orientation,  including address, marital status, dependents, whether we lived in more than one state, had any dependents, and more.

Credit Karma Tax 2020 review

(Image credit: Tom's Guide)

Credit Karma Tax’s interface is built around a tax home page dashboard, with a center-weighted design and separate modules that work well whether on a desktop or in a mobile environment. Once your basic info is confirmed, you can move around the different modules to enter data at will.

Credit Karma Tax 2020 review

(Image credit: Tom's Guide)

Credit Karma Tax continues to use plain-English language about finances, true to its origins as part of Credit Karma. Somehow, the lack of upsell does translate into more meaningful responses.

Credit Karma Tax 2020 review

(Image credit: Tom's Guide)

Along the top, Credit Karma Tax groups data entry by five core tabs that are much more clear than previous versions: Info, Income, Expense, State and Review. These tabs merely jump to those sections lower in the page, but they do provide at-a-glance clarity. Within sections, Credit Karma Tax now suggests the forms for you based on what was already entered; however, that also means that you might be looking for something and not find it, depending upon whether what you entered is correct.

Credit Karma Tax 2020 review

(Image credit: Tom's Guide)

Meanwhile, some things haven’t been updated in the interface. For example, for personal business Credit Karma Tax still lacks specificity in the drop-down.

Credit Karma Tax 2020 review

(Image credit: Tom's Guide)

As with the last time we looked at Credit Karma Tax, we often were stymied by the overly simple interface. When entering business info, you start in multipage view and can change it to a very long single page view — which oddly includes the business expenses we were looking for elsewhere. Under Gifts to Charity, we still feel the data entry could be streamlined: We  had to go through multiple screens related to charitable donations and gifts, first one for cash gifts with no way to itemize those gifts and then another three screens to add each itemized non-cash donation.

The worst offense that carries over from previous generations: To add expenses in a Schedule C form, we still had to enter each expense individually (including the description and the amount). This interface idiosyncrasy alone could be a deal breaker for self-employed tax filers with numerous expenses.

Credit Karma Tax 2020 review: Verdict

Credit Karma Tax 2020 remains a reasonable free option for filing federal and state taxes. It appeals to those enticed by the word free, and can handle a surprising variety of tax situations, but when you run into tax questions, be prepared to pay with your time to find help outside of Credit Karma Tax. If you’re likely to need assistance, or would like a tax pro to go over your documents, both H&R Block Deluxe and TurboTax Deluxe are better, if more expensive options. We also prefer their more intuitive menus.

On the whole, Credit Karma remains surprisingly solid for a free service. For some, its lack of finesse may not matter to you if you are looking for a no-cost way to handle your taxes.