Tax season opens Monday, and the Internal Revenue Service has announced that it has expanded its free online system for filing 2024 returns directly with the federal government.
The Direct File option was initially offered in a dozen states last year to low- and moderate-income taxpayers with simple returns.
The trial went well, with most filers giving it high marks. The agency said it would expand the program this year, making it available to millions of taxpayers in 13 more states and adding features to cover more tax situations.
Whether Direct File continues beyond this year, however, remains to be seen. The offering has faced opposition from commercial tax-preparation software firms and from Republican members of Congress, who last month urged then-President-elect Donald J. Trump to end what they called the “unauthorized and wasteful” program. (The I.R.S. was tasked with exploring a free direct-filing option as part of the Inflation Reduction Act of 2022, the wide-ranging law championed by Democrats and the Biden administration.)
Scott Bessent, President Trump’s nominee for secretary of the Treasury Department, which oversees the I.R.S., pledged at his confirmation hearing before the Senate Finance Committee this month that if he were confirmed, Direct File would operate for this year’s tax season. He said he would then “study” the program.
The I.R.S. accepted more than 140,000 Direct File returns last year. Most were from single filers. Their average age was 33, their average income was $44,000 and a quarter had income under federal poverty guidelines, the I.R.S. said.
This year, according to the I.R.S. online eligibility tool, single filers with wages of $200,000 or less in 2024 can use Direct File. For those with more than one employer, the cutoff drops to $168,600. Married couples filing jointly are eligible as long as their combined wages don’t exceed $250,000. People who itemize deductions aren’t eligible to use Direct File.
Adam Ruben, vice president of campaigns and political strategy at the Economic Security Project, an advocacy group that champions efforts to help low- and moderate-income families, including free tax filing, said he was “optimistic” the program would endure because it’s easy and free. “I think it will sell itself,” he said. “No one loves to do their taxes, but you shouldn’t have to pay to get it done.”
On average, Americans spend about 13 hours and $270 to prepare their taxes every year, according to the I.R.S.
In last year’s pilot program, which was available for just part of the filing season, Direct File was limited to people with income such as wages reported on W-2 forms, Social Security income, unemployment payments and interest income under $1,500. This year, the system will be available from the first day of filing season and can also be used by people with higher interest income and some types of retirement income. (Gig workers still aren’t eligible.)
This year’s version can also handle returns claiming more types of tax credits. In addition to the earned-income tax credit, the child tax credit, and the credit for other dependents, this year the system will cover filers claiming the child and dependent care credit; the premium tax credit for those who get health coverage from the Affordable Care Act marketplace; the credit for the elderly and disabled; and the retirement savings contributions credit, which is also known as the “saver’s credit.”
People with deductions for contributing to a health savings account, a type of tax-favored account paired with a high-deductible health insurance plan, can also use the tool.
This year, users will have the option of having their Direct File tax form filled in with some information the I.R.S. already has, like their name, address and Social Security number. They’ll also be able to have financial information from their Form W-2 wage statement imported electronically, but that function won’t be available until February, according to an I.R.S. video shared with reporters.
“This is a huge step forward and will decrease barriers for many households,” said Courtney O’Reilly, senior program manager for tax benefits at Code for America, a nonprofit group that has worked with six states to create free state filing tools that work with Direct File.
Filers can use Direct File on a mobile phone, laptop, tablet or desktop computer. Like commercial tax software, the system asks questions to guide users through their return. Filers can get help using a live chat feature.
The Government Accountability Office, which generally praised last year’s pilot in a report in December, said the I.R.S. was behind in training customer service representatives for the program this year. In response, the I.R.S. said that it was “on track.”
Taxpayers must create an online I.R.S. account to use Direct File. You’ll need to verify your identity by uploading a driver’s license or other ID and a photograph of yourself.
Filers who must also file state tax returns are guided to a state website after completing their federal form.
Matthew Chaves, 19, a college sophomore from Durham, N.C., attending school near Boston, just filed his taxes himself for the first time as part of a test phase for Direct File. Previously, he said, he had filed taxes with guidance from his mother, using commercial tax-preparation software, so he was relieved to complete his federal return on his own in about half an hour. He said he also liked that his North Carolina state tax return automatically populated with his federal information. “It was super seamless,” he said. “And also, it’s free!” He’s expecting a refund of $40.
Taxpayers with income of $84,000 or less still have the option of using the separate Free File program, a partnership between the I.R.S. and several do-it-yourself tax software firms, to file free electronic returns. The I.R.S. also provides free online forms, without step-by-step guidance, that filers can use, regardless of income, to file federal returns.
Some commercial providers also offer free options for filers based on their income, but consumers have sometimes found the terms of the deals confusing. Last year, the Federal Trade Commission found that Intuit, the parent of TurboTax, had engaged in deceptive advertising about its free tax filing product. Intuit has appealed the finding and the case is before the U.S. Court of Appeals for the Fifth Circuit. In an email, the company said it “looks forward to defending itself in front of a neutral arbiter and has always been clear, fair and transparent with its customers and is committed to free tax preparation.”
The start of filing season comes amid a shake-up of I.R.S. leadership. Daniel Werfel, who oversaw the Direct File pilot as the agency’s commissioner, resigned Monday. (Mr. Werfel was appointed by President Joseph R. Biden and his term was scheduled to run through late 2027. But Mr. Werfel said he would resign on Jan. 20, citing President Trump’s stated plan to nominate a replacement.)
Here are some questions and answers about Direct File and the 2025 tax season:
What states will offer Direct File this year?
In addition to the 12 states that offered the tool as a pilot last year — Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming — eligible taxpayers in 13 more states can use the system: Alaska, Connecticut, Idaho, Illinois, Kansas, Maine, Maryland, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania and Wisconsin.
How do I know if I’m eligible to use Direct File?
You must have lived and worked in a participating state for all of 2024, and meet other requirements. To see if you qualify, check online at IRS.gov.
When is the tax filing deadline this year?
The federal tax filing deadline is April 15. Direct file is scheduled to be available until Oct. 15, the deadline for those who requested an automatic extension to file.
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