BUSINESS

IRS to Permanently Offer Direct File Option for Federal Tax Returns Starting 2025

Deasia Grant

Jun 22, 2024 — 2 min read

WASHINGTON — The Internal Revenue Service (IRS) announced today that it will make its Direct File program a permanent feature for federal tax returns, starting with the 2025 tax season. This decision comes after a successful pilot program in 2024, which saw over 140,000 taxpayers from 12 states use the service, garnering positive feedback from users, state officials, and lawmakers alike.

Direct File, designed to provide a no-cost electronic filing option, has been hailed for its simplicity and efficiency in tax filing. Commissioner Danny Werfel emphasized the overwhelming support from taxpayers for having multiple free filing alternatives.

"We listened to taxpayers across the nation who expressed a desire for accessible, no-cost options to file their taxes electronically," Werfel said. "The permanence of Direct File reflects our commitment to improving the tax filing experience and ensuring taxpayers receive the refunds they deserve."

The IRS plans to expand Direct File's eligibility to include more taxpayers and a wider range of tax situations by 2025. This expansion will include efforts to partner with all interested states, with several new states expected to join the program. Additionally, the IRS aims to enhance support for various tax scenarios, focusing initially on those affecting working families.

"We are committed to enhancing user experience and integrating seamlessly with state tax systems as we expand Direct File," Werfel added. "Accuracy and facilitating the uptake of tax credits will remain our top priorities to help taxpayers file correct returns and receive timely refunds."

While Direct File will provide another option alongside services offered by tax professionals and software providers, the IRS reiterated its support for the Free File Inc. program, recently renewed for five years. The agency also plans to bolster other free filing options such as the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs to coincide with Direct File's expansion.

"We want to ensure that taxpayers have a range of reliable options for filing their taxes, whether through Direct File or other trusted services," Werfel stated.

Further details on expanded eligibility criteria and state partnerships are expected to be announced in the coming months, as the IRS prepares for the 2025 tax season.

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