Why did I not have the option to file free? It says I claimed one income credit this year

[rjs · Accepted solution]

Because the IRS has made major changes to Form 1040 for 2018, TurboTax has had to change what tax situations are included in Free Edition. Some of the things that used to be included are no longer included, and some things that used to not be included are now included.

The IRS has simplified Form 1040 by moving many of the entries that used to be on Form 1040 to a set of six separate schedules. There are no short forms 1040A or 1040EZ for 2018. All 2018 tax returns will be filed on Form 1040. TurboTax Free Edition for 2018 will only prepare simple tax returns that can be completed with Form 1040 itself. Anything that requires one of the six new schedules requires an upgrade.

You didn't say what credit you claimed. The only credits that can be claimed on Form 1040 without Schedule 3 or Schedule 5 are the following.

• Child tax credit and additional child tax credit
• Credit for other dependents
• Earned Income Credit (EIC)
• The refundable portion of the American Opportunity Credit

Many of the credits that were on Form 1040 in previous years have been moved to Schedule 3 or Schedule 5. These include the following. If you claim any of these credits, you have to upgrade.

• Foreign tax credit
• Child and dependent care credit
• The nonrefundable portion of the American Opportunity Credit
• Lifetime Learning Credit
• Retirement savings contributions credit ("Saver's Credit")
• Residential energy credit
• Net Premium Tax Credit (for Marketplace insurance)

[mesquitebean]

No one here in the public user community forums can know what all your return consists of, but we can speak in general to that, and offer another option.

First of all, there is a known "bug" that is having some Free Edition users upgrade when it's not necessary if they entered a state refund from last year.  See this FAQ:
https://ttlc.intuit.com/questions/4515732-in-free-edition-of-turbotax-online-looping-when-asking-to-...

Here are some other possibilities:

Because of new changes in the tax laws for 2018, there may be some filers who can no longer use regular Free Edition this year.   But there is soon to be released a second free product that you might consider as well, if necessary.  I'll provide more info about it below.

The Free Edition is more limited this year due to tax law changes.    If you need any of the new Schedules 1-6, for instance, then you can't use Free Edition.   

Here are some common things that cannot be handled by the regular Free Edition:

     Itemized deductions
     Business or 1099-MISC income
     Sales of stocks/mutual funds/bonds
     Rental property income
     Foreign Earned Income
     HSA
     Credits, deductions and income reported on the new schedules 1–6, such as the Student Loan Interest Deduction

TurboTax has another free product that will start up around mid-January called the TurboTax Free File Program.  It is free for both Federal and State--IF you meet just one of the qualifications.   It can handle all the usual forms without the limitations of regular Free Edition.

See this FAQ to see if you meet one of the qualifications:
https://ttlc.intuit.com/questions/1900583-what-is-turbotax-free-file-program

When it opens, the TurboTax Free File Program will be located at the link below.  It requires a new User ID from what you are currently using for Free Edition since it is a different website, and the IRS requires it to be disconnected from the TurboTax commercial products.
https://turbotax.intuit.com/taxfreedom/