Are you a Credit Karma Tax customer? Then Cash App Taxes is your new home for free DIY tax services. If you want to continue using the same simple and free tax services of Credit Karma Tax, use Cash App. Don’t worry, you can access all of your prior Credit Karma Tax returns through Cash App Taxes starting January 2022. Here’s what you need to know.
As of October 16, 2021, Credit Karma Tax no longer exists. Cash App Taxes takes its place. Square, Inc. announced its acquisition of Credit Karma Tax in November 2020, and now the merger is official.
Square, Inc. is the parent company of Cash App. As a result of the Credit Karma Tax acquisition, the Cash App has now added DIY tax services to its financial service offerings. If you were a Credit Karma Tax customer, keep reading to learn how this may affect you.
Why did Square acquire Credit Karma Tax?
The short story is that Intuit was forced to divest the Credit Karma Tax product as part of an antitrust agreement with the Department of Justice as requirement to win approval of Intuit’s $7.1 billion acquisition of Credit Karma.
Compared to TurboTax, Credit Karma Tax is a small player, so why was the Justice department concerned about the merger creating a monopoly?
Credit Karma Tax’s consumer base accounts for approximately 4.4% of all people who use software to file tax returns yearly. In contrast, Intuit, Inc. owns about 67% of the DIY tax service market. Why does this matter? Well, Intuit attempted to buy Credit Karma Tax before Square. It didn’t work out because The Department of Justice classifies a company with control of more than 70% of any market as a potential monopoly. Therefore, the DOJ prevented Intuit from acquiring Credit Karma Tax.
This opened up the opportunity for Credit Karma Tax to make a deal with Square, Inc. and its Cash App.
What changes can I expect now that Credit Karma Tax is a Cash App product?
Although Credit Karma Tax has been renamed Cash App Taxes as of October 16, 2021, you can still get free tax preparation with the same app. You just have to access the app through Cash App instead of Credit Karma. Cash App Taxes has promises a smooth transition for its existing customers. Cash App Taxes will also include free audit defense when you file your federal and state tax returns with Cash App tax. This is a nice feature, particularly when you consider that TurboTax charges for its Tax Audit Defense.
However, if you need easy access to previous tax returns, you may be disappointed. Previous tax returns filed with Credit Karma Tax won’t be easily available within Cash App Taxes until next year. Nevertheless, if you need a copy of a previous tax return now (for example, you may need it for a mortgage application or financial aid application), you still have some options.
If you need to access tax returns earlier than that, submit a case on your desktop to Cash App Taxes. You can also get a transcript of your taxes here. To receive a copy of your full tax return, complete Form 4506. This route will cost you $43 and take about 75 days.
What if I don’t plan to migrate to Cash App Taxes?
If you previously e-filed with Credit Karma Tax and you prefer to transition to another platform for filing your taxes next year, you will probably need to access your tax returns from Credit Karma Tax. There are two ways to do this:
- Submit this form to Cash App. A Cash App tax advocate will validate your information and send you prior tax returns filed with Credit Karma Tax.
- Get your prior tax returns from the IRS. You can use the IRS Get Transcript tool for your tax transcript. To receive a copy of your full tax return, complete Form 4506. This route will cost you $43 and take about 75 days.
Taxpayers who are in the market for a new DIY tax preparation product have plenty of options. SuperMoney’s tax preparation comparison tools can help you compare services and find the best option for you.
What happens to my Credit Karma Tax account?
You will now access this tax product through the Cash App instead of the Credit Karma Tax app. If you do not have the Cash App, you will need to download it and create an account.
The tax services are still totally free, and you can still file your taxes on your desktop computer if you want. The only difference is that you access your tax services as a part of Cash App’s financial suite.
Will Cash App Taxes still be free?
Yes. Cash App Taxes has announced it will continue to be 100% free for both federal and state taxes.
Can you still file your taxes on your computer?
Yes. Cash App Tax may be a mobile app but you can still file your taxes on your computer.
Once you are ready to file, you will use Cash App to log in by scanning a unique QR code. After that, you can continue filing on your computer. If you don’t already have Cash App, you will need to download it on your phone and create an account (Cash App on Google Play, Cash App on the App Store)
Does Cash App Taxes offer any guarantees?
Yes. Cash App Taxes will continue to provide a Max Refund Guarantee and an Accurate Calculations Guarantee just like it did under Credit Karma Tax.
- Square, Inc. announced its acquisition Credit Karma Tax in 2020. As of October 16, 2021, Credit Karma Tax is renamed Cash App Taxes.
- The same free, simple, DIY e-filing services of Credit Karma Tax are now available through Cash App. To use these services this coming tax season, download Cash App and make an account. You can also access it via desktop.
- Tax returns from Credit Karma Tax will be available within Cash App Taxes starting January 2022. If you want to access tax returns earlier or you don’t plan on using Cash App Taxes, you can submit a case to Cash App Taxes.