In 2022, several major tax companies are courting student loan borrowers with the promise of free state and federal filing for people claiming education credits and student loan interest deductions.

Anyone who qualifies to file their taxes for free should take advantage of these software packages.

However, filers expecting free filing should watch out for gotchas. Student loan borrowers who aren’t careful may wind up paying for expensive software. Below, we compare the top tax software options for students and student loan borrowers.

Why "Free" Tax Software Might Not Be Free For Most Student Loan Borrowers

Tax filing software companies often plaster “FREE!” all over their advertising. But many student loan borrowers won’t qualify for free returns. In 2022, several companies offer free software for people who want to claim the student loan interest deduction. In fact, two premium software packages, H&R Block and TurboTax support this deduction on their free tier.

However, this so-called free software may not be suitable for all student loan borrowers. Filers might use one of these packages to “start for free” only to find they don’t qualify for the free option. It can be frustrating!

Many filers will need to pay for the most expensive version of the software because they have self-employment income. Self-employment is an expansive term that covers a wide range of work situations including most side hustles.

For example, people who flip items on eBay, those who drive for rideshare companies, and many others have to file a Schedule C. These jobs, which you may have taken on to help pay off your debt qualify as self-employment income. This type of income often requires upgrading to an expensive "Self-Employed" package.

Below, we clearly lay out which tax situations each software supports for free (and which situations aren’t supported). That way student loan borrowers can figure out what software will work for them.

Top Tax Software For Student Loan Borrowers

This year, our top software options for student loan borrowers include H&R Block Free, TurboTax Free, Cash App Taxes, and TaxHawk.

H&R Block

H&R Block offers a simple experience. It allows users to import W-2 and 1099 forms right into the software. The software then takes over generating the returns. Importantly, education credits and the student loan interest deduction are both included on the free plan.

TurboTax

When we review the best tax software each year, TurboTax is always near the top in terms of ease of use, navigation, and support options. It also covers the student loan interest deduction on the free plan. But unlike with H&R Block, you'll need to upgrade to a TurboTax paid tier if you want to claim education credits.

Cash App Taxes

Cash App Taxes offers completely free state and federal filing for most filers. However, it does not support multi-state filing (which can be difficult for students living and working in multiple states).

TaxHawk

Finally, TaxHawk offers low-cost software that supports all situations. It’s not as easy to use as the other three software, but it has a very good user experience given the low price point.

What Student Loan Borrowers Should Look For In A Tax Software

Price is, of course, a top consideration when choosing tax software. But it isn’t the only consideration. Student loan borrowers should also consider how easy it is to use the software.

Premium software like H&R Block and TurboTax makes filing very easy, even for filers with complex taxes. Users can snap pictures of their tax forms and upload them directly to the app. The app takes care of the rest. Filers can also quickly figure out how to add rental or self-employment income and the associated deductions. These features are great, but filers have to weigh the benefit with out-of-pocket costs they will expect to pay.

Free and low-cost software options like Cash App Taxes and TaxHawk aren't typically as easy to use. Filers using these options may expect to spend a bit more time preparing their returns. However, they clock in at lower price points.

In general, we recommend choosing premium software when you can use it for free. Filers who can’t use the free software face a more difficult decision and should decide whether to spend more time or more money filing their taxes.