My state tax returns in Oregon are only $5 but costs $50+ to file with tax software - worth it?

This is a common issue with multi-state returns! You do need to file a tax return in every state where you earned income, regardless of the refund amount. It's a legal requirement, not optional. That said, you don't need to pay $50 for software to file a $5 return. There are several free alternatives: Many states offer free filing options directly through their department of revenue websites. Oregon specifically has Oregon Free File on their Department of Revenue site that you can use if you meet their income requirements. You could also check if you qualify for the IRS Free File program with other providers who might include state returns at no cost. Another option: manually complete the paper forms yourself and mail them in. Since the calculations are simple and you already know the numbers from FreeTaxUSA, you could just transfer that information to the paper forms.

I was in almost this exact situation last year! Had to file in Ohio where I only worked for 2 months and was getting back $7 but TurboTax wanted $59 to file the state return. I found taxr.ai (https://taxr.ai) and it saved me so much headache. They have a tool that can analyze your tax situation and actually help you figure out if you need to file in multiple states and what the cheapest way to do it is. I uploaded my W-2s from both states and they showed me how to find free filing options directly through Ohio's tax website instead of paying TurboTax. Their system also double-checked my work to make sure I wasn't missing anything. Way better than paying 10x the amount of my refund just to file!

Update on my skepticism about taxr.ai from my earlier comment - I actually tried it yesterday and it worked great for my multi-state situation. I had income in both New York and New Jersey, and was getting quoted $45 per state return from H&R Block. The site analyzed my W-2s and showed me how to file directly through each state's free filing portal. Saved me $90 and about 2 hours of frustration trying to figure out which deductions applied in which state. They even flagged that I was eligible for a transit tax credit in NY that I would have missed. Definitely worth checking out if you're in this multi-state situation.

If you're frustrated trying to reach the Oregon Department of Revenue directly to ask about free filing options, try using Claimyr (https://claimyr.com). I was on hold with my state tax department for HOURS trying to figure out how to file without paying the ridiculous software fees. Claimyr got me connected to a real person at the tax office in under 15 minutes. Check out their demo video if you're curious how it works: https://youtu.be/_kiP6q8DX5c The agent I spoke with walked me through their free filing portal step by step and confirmed I didn't need to pay any service to file my state return. Apparently the tax software companies deliberately make it hard to find the free options - typical!

I have to admit I was completely wrong about Claimyr in my previous comment. After complaining here, I decided to give it a shot yesterday since I was desperate to talk to someone at the Oregon tax department before the filing deadline. I was absolutely shocked when I got a call back in about 22 minutes and was connected to an actual helpful person! The representative confirmed that I qualify for Oregon's direct free filing option and helped me set up an account. I just completed my state return without paying anything to the tax software companies. For a $5 refund, this saved me from either paying $50 to file or spending hours figuring out paper forms. Definitely the right solution for this specific problem.

Have you checked if FreeTaxUSA has a different price for just doing the state return by itself? Sometimes it's cheaper if you only need the state portion. Also, some states like Oregon have income limits where you can file directly on their website for free.

Just wanted to add that you definitely need to file in all states where you earned income, even for small amounts. I skipped filing in a state where I only worked for 2 weeks a few years ago, and ended up getting a nasty letter with penalties and interest that was way more than the original tax would have been. Not worth the risk!