Some taxpayers can file their federal taxes online with the Internal Revenue Service -- for free.

The IRS says taxpayers may be eligible for free online tax preparation and free electronic filing through a partnership between the Internal Revenue Service and the Free File Alliance, a consortium of participating tax software companies.

Generally, eligibility is based on income levels, age and-or state residency. But some companies offer free services without restrictions.

The free-file program is designed to encourage more taxpayers to file electronic returns, which are cheaper for the IRS to process. The IRS expects half of the returns filed this year to arrive electronically. In 2004, nearly 62 million returns were filed electronically.

The IRS says taxpayers who file online generally receive their refund in half the time than filing on paper -- even faster with direct deposit. Refunds from mailed paper returns can take up to six weeks.

Taxpayers who go online to use the free electronic-filing program can check out Free File Alliance members to see what services are offered. The IRS says taxpayers must go through its Web site to ensure they qualify for free services.

Free File Alliance Members

• eSmartTax: Free federal online tax preparation and e-filing for all taxpayers. No restrictions. Everyone qualifies.
• eFile Tax Returns: Free federal online tax preparation and e-filing if you have an adjusted gross income of $28,000 or more.
• FreeTaxUSA: Free federal online tax preparation and e-filing if you live in Arizona, California, Colorado, Georgia, Illinois, Indiana, Louisiana, Michigan, North Carolina, New Jersey, Ohio, Pennsylvania, Utah, or Virginia.
• TurboTax: Free federal online tax preparation and e-filing for all taxpayers. No restrictions. Everyone qualifies.
• H&R Block: Free federal online tax preparation and e-filing if you have an adjusted gross income of $34,000 or less.
• FileYourTaxes: Free federal online tax preparation and e-filing if you live in Arizona, California, Delaware, California, Georgia, Illinois, Maryland, Michigan, North Carolina, New Jersey, New York, Ohio, Oregon, Virginia or Wisconsin. Also qualify if age 18 or younger.
• OnlineTaxes: Free federal online tax preparation and e-filing if you are eligible for EITC, and an adjusted gross income of $45,000 or less, or are age 25 or younger.
• Free Tax Return: Free federal online tax preparation and e-filing if you have an adjusted gross income of $32,000 or less.
• CompleteTax: Free federal online tax preparation and e-filing if you have an adjusted gross income of $28,500 or less.
• TaxEngine: Free federal online tax preparation and e-filing if you have an adjusted gross income of $35,000 or less.
• TaxSlayer: Free federal online tax preparation and e-filing if you are age 25 or younger or 61 or older, or active in the military, or if you qualify for the EITC.
• TaxACT: Free federal online tax preparation and e-filing for all taxpayers. No restrictions.
• exTaxReturn: Free federal online tax preparation and e-filing of form 1040EZ if you have an adjusted gross income of $40,000 or less and just one W-2.
• Braman Tax Services: Free federal online tax preparation and e-filing if you have a federal refund less than $500.
• 1040Now: Free federal online tax preparation and e-filing if you are eligible to use Form 1040EZ or if you have an adjusted gross income of $100,000 or more.

The IRS says taxpayers must access Free File Alliance members through its Web site to ensure they qualify for free services.

Here's how the program works:

• Step 1: Locating Free Services
  Taxpayers can locate the free services by clicking here. The IRS site lists the Free File Alliance members and their offerings. The IRS says taxpayers must go through its Web site to ensure they qualify for free services.
• Step 2: Determine Eligibility
  At the Free File Web site, each company has a simple description of their eligibility criteria for using their free service. Taxpayers may also find additional company information by accessing the "more details" link for each respective company.
• Step 3: Link To Free Services
  After taxpayers match their situations with a company’s eligibility requirements, they can link directly to the Free File Alliance member’s Web site. Taxpayers will leave the IRS Web site and enter the Alliance member’s Web site. The free services are available only through the Internet.
• Step 4: Prepare And File Tax Return
  At the Alliance member’s Web site, taxpayers can prepare their tax returns using the member’s online proprietary software. Taxpayers can file either the Form 1040, Form 1040-A or Form 1040-EZ. Completed tax returns will be sent electronically from the Alliance member to the IRS using the existing IRS e-file system. The Free File Alliance members must comply with all federal laws protecting taxpayer information.

The IRS does not endorse any of the tax products or other services offered for sale by the participating companies.