No more TurboTax? Minnesotans could file state income taxes for free under bill at Capitol.

State legislators are advancing a plan that would allow all taxpayers to electronically file their Minnesota income tax returns free of charge.

The provision is part of the mega House omnibus tax bill, which cleared the House Tax Committee on Tuesday.

Currently, only taxpayers with an adjusted gross income of up to $84,000 can electronically file their state returns for free. Others must use sometimes costly services like TurboTax.

“This is really important,” said bill co-sponsor Rep. Aisha Gomez, DFL-Minneapolis.

“We should not ... be farming out this function, this basic function of government,” she added, citing for-profit tax preparers’ practice of harvesting taxpayers’ personal information as motivating her push.

In 2023, state legislators set aside $5 million to develop the free tool meant to complement the federal Direct File program created under President Joe Biden.

Earlier this year, Gov. Tim Walz proposed killing that plan because of a lack of ongoing funding to maintain it and shaky support for the federal program. Tax preparation companies have opposed the IRS’s Direct File since its inception and the Trump administration now plans to eliminate it, the AP reported in April.

Gomez’s bill would keep Minnesota’s plans for a free filing system alive and pump an extra $2.4 million into its development through the 2027 fiscal year.

The bill directs the state to make the system available by 2026 and coordinate with any federal filing systems “to the extent feasible.”

“We can do a direct file without having the feds do it,” Department of Revenue Commissioner Paul Marquart told the House Tax Committee on Tuesday. “It does create some more complications.”

Those complications will be hashed out as the bill moves through the legislative process, Marquart said. Its next stop is the House Ways and Means Committee on Thursday.

The free tax filing system was not included in the Senate’s omnibus tax bill. Sen. Ann Rest, DFL-New Hope, that bill’s author, said it would be discussed in the conference committee that will reconcile differences between the two bills.

In a statement, Walz spokeswoman Claire Lancaster said the governor “values any and all ideas to save taxpayers time and money.” But that may be complicated by the pressing need to balance the state’s books before the session ends later this month.

“Because this program would require ongoing state funding to implement effectively, the governor and legislative leaders will consider it as they work to compromise on a balanced state budget,” she said.