On Tuesday, North Carolina Gov. Mike Easley announced that, for the first time, many North Carolina taxpayers will be able to file their state tax returns electronically at no cost due to Free E-File, a partnership between the Department of Revenue and two online tax filing companies. Individuals previously had to purchase their own software and pay a related online filing fee.

"Free E-File will make preparing tax returns simpler and faster," said Easley. "This electronic option offers an efficient alternative to paper filings, and the new partnership will make it easier and more affordable for taxpayers to file online."

Two private companies, TaxEngine.com and Tax$imple, will provide access to free Internet tax preparation software and will file returns free for taxpayers who qualify. The service is available to taxpayers with an adjusted gross income of up to $50,000. The companies provide free filing of federal income tax returns as well. Citizens who chose to use other tax preparation software will be subject to customary costs and filing expenses.

The Department has participated in the Federal/State Electronic Filing Program for 12 years, but this marks the first time taxpayers have been able to file online without cost.