Intuit Relaunches Credit Karma Tax as Free DIY Filing Option

Intuit announced on October 20, 2026 that it is bringing back Credit Karma Tax, with $0 federal and $15 flat-rate state return preparation and filing, as TurboTax moves further towards paid live support. The Credit Karma Tax free filing service is aimed at younger filers.

For accountants the launch matters because it splits Intuit’s consumer tax business in two. TurboTax now earns more than half its revenue from live support, and Intuit plans to lean further into that. The free do-it-yourself market, where many first-time filers start, is being routed to a different brand.

It is also the second time Credit Karma has sold tax filing. The first version was sold to Square for $50 million in 2020 on the order of the US Justice Department. Intuit says the new product is separate and was built from scratch.

What Credit Karma Tax free filing includes

Federal preparation and filing costs nothing. State returns cost a flat $15. The product draws on the financial data a member already holds in Credit Karma, including income, credit, cash flow and taxes, and uses it to pre-fill the return from a document checklist.

Filers can skip manual entry by photographing a form or importing documents directly from employers and financial institutions. Supported imports include stock sales and financial and crypto transactions.

Intuit backs every return with a 100% accuracy guarantee. If a calculation error causes an IRS or state penalty, Intuit said it would cover the penalty and interest.

The AI layer is an expert chat function, plus Explanation and Error agents due later that explain return outcomes and catch mistakes during preparation. Three further agents work beyond tax. The Refund Agent turns a refund into a plan to pay down debt, save or invest. The Debt Agent builds paydown plans, and the Paycheck Agent allocates pay across bills, spending and goals.

Members who open a Credit Karma Checking account can receive refunds up to five days early. With the tax year 2026 launch, filers can also apply for a refund advance of up to $4,000 with $0 loan fees and 0% APR.

Two paid add-ons sit on top. The Expert Support Bundle includes audit defence, ID protection, one-to-one live product support and the option to pay the $15 state fee from the refund. Expert Final Review adds a check by a tax expert and will be available at launch. Intuit has not published prices for either in its announcement.

How it differs from TurboTax Free Edition

TurboTax already offers free federal and state filing to many users, so the overlap is obvious. Mark Notarainni, executive vice president and general manager of Intuit’s Consumer Group, said in an email that the two products meet different needs.

The dividing line is complexity. TurboTax Free Edition is limited to simple returns covering income reported on a Form 1040 alone, which Notarainni put at about 37% of taxpayers. Credit Karma Tax is meant for filers whose returns go beyond that, with free federal filing.

“We believe GenZ filers who make under $50K, but may have more complicated taxes than a 1040-only return (which is what TT covers), will be the ones who use Credit Karma Tax.”

Mark Notarainni, Executive Vice President and General Manager, Intuit Consumer Group

Intuit has not listed which forms and schedules Credit Karma Tax supports, or whether any situations are excluded. The only stated limit is the $15 state charge. Notarainni said TurboTax Free Edition “is not going anywhere”.

The strategic logic is year-round engagement. Credit Karma Tax lets Intuit extend budgeting, credit monitoring and other services to filers outside the tax season. Because the tax product reads the same financial data as the rest of Credit Karma, a tax return becomes another input to those services. Intuit has not said how long it retains the tax data or what rules govern its use in marketing, and filers should read the terms before connecting accounts.

The history behind Credit Karma Tax

Credit Karma ran its own tax preparation and filing service from 2017. When Intuit agreed to buy the company in a $7.1 billion deal, the Justice Department required it to divest the tax business.

The department’s concern was that Credit Karma Tax had become a disruptive competitor in digital do-it-yourself preparation. Combining it with TurboTax, it said, would likely mean higher prices, lower quality and less choice for consumers.

Intuit and Credit Karma sold the software and intellectual property to Square Inc. for $50 million in cash. Square folded it into Cash App as Cash App Taxes, which remains a free competitor.

Notarainni acknowledged the divestiture but said the new service is a different product.

“The Credit Karma Tax offering we announced today is a brand-new, distinct product that was built on Intuit’s platform technology from the ground up.”

Mark Notarainni, Executive Vice President and General Manager, Intuit Consumer Group

He added that Intuit “fully complied with obligations related to its acquisition of Credit Karma and divestiture of Credit Karma’s former Tax business”. The decision to build it, he said, followed changes in customer needs and behaviour.

Free DIY filing after IRS Direct File

The launch arrives after the government’s own free option has closed. An IRS official, Cynthia Noe, told state comptrollers by email in November 2025 that Direct File “will not be available in Filing Season 2026” and that no launch date had been set.

That leaves commercial free filing, plus the IRS’s existing arrangements for IRS e-file, as the main routes for taxpayers who do not pay a preparer. Intuit now holds two free filing routes, with TurboTax Free Edition for simple returns and Credit Karma Tax for the rest.

Regulators have a record here. The Justice Department treated free DIY tax software as a market worth protecting in 2020. Whether it views the same company selling a free product under a second brand differently is not addressed in Intuit’s announcement.

What Credit Karma Tax free filing means for preparers

No practitioner or independent analyst has yet commented on whether the product will push filers towards paid professionals or away from them. The mechanics point both ways.

The target group is filers under $50,000 of income with returns that include investment sales, crypto or other forms that a 1040-only product cannot handle. Many of these people are the least likely to hire a preparer on price alone. A free federal return with an accuracy guarantee gives them less reason to start paying one.

The paid steps are built to catch the opposite flow. Expert Final Review and the Expert Support Bundle sell a human check to filers who begin in the free product and want reassurance. Intuit already sells the same kind of support through TurboTax. Preparers who serve the same clients should expect that comparison in the first conversation about fees.

Firms with a young client base can respond practically. Engagement terms and consent should be clear before the season starts, and the Tax season engagement and consent kit covers that groundwork. Practices that adopt AI-assisted review of their own returns should also read the AICPA AI Tax Risk Group guidance on professional duties.

Intuit has not given a launch date beyond the coming filing season and the tax year 2026 refund advance. The first returns filed through Credit Karma Tax, and whether the Explanation and Error agents are ready by then, will show how much of the complex-return market the free option takes.