It is a cooperative effort between the IRS and state tax administration agencies to provide state tax free inline filing. This system is available for both state and federal tax returns and it is basically known as e-filing. This can be accessed through your home computer, and you can pretty much guarantee if you pay a tax professional he or she is using these free services.
Each state has their own tax requirements and at present there are 38 US states which allow their residents state tax free online filing. It is a simple process to find out what these states are by simply accessing the IRS main site and clicking on the appropriate link.
There are also certain income requirements which allow diligent tax payers to make use of e-filing, but 70% of the population of the US fits these profiles. Both federal and state taxes may be filed simultaneously, and what a big relief it is to get that all done and out of the way before the deadline.
Electronic filing places both state and federal tax returns in a separate packet, and they are submitted to the IRS, in a "Taxpayer Envelope". They confirm receipt of the envelope within 48 hours, and they also act as a "Post Office" for the particular state in which the taxpayer is resident.
This option is of huge benefit to the taxpayer as it means the tax return is 100% correct because the software eliminated any errors. It is processed far more efficiently and the taxes don't have to be sent to separate agencies, which always makes us nervous. Refunds are also processed much faster and this is paid back by direct deposit into the savings or checking account of the taxpayer.
For the environmentalists amongst you, it saves paper, and if 70% of the population of the US e-files, think about the paper savings, think how many trees can be saved and this should motivate you to find out more about state tax free online filing.