The IRS is expanding its Direct File program to make tax filing easier and free for eligible taxpayers. For the 2025 tax filing season, more than 30 million Americans across 24 states will be able to file their federal tax returns without cost, thanks to the success of the pilot program launched in 2024.
This new initiative is part of the IRS’s broader efforts to make tax filing more accessible, especially for low- to middle-income taxpayers. Let’s dive into the details about the Direct File program, who can use it, and how it works.
What Is IRS Direct File?
IRS Direct File is a free online tool that allows eligible taxpayers to file their federal tax returns directly with the IRS, bypassing third-party software providers and avoiding filing fees. It was initially launched as a pilot in 2024 in 12 states and is now expanding to 24 states for the 2025 tax season.
The program supports a wide range of tax situations, covering both wage earners and those with various income sources like retirement income and unemployment compensation.
The Direct File program offers a simple, user-friendly interface and allows taxpayers to file returns accurately and securely. It’s especially beneficial for those with straightforward tax returns, including those earning income from W-2 forms, Social Security, and 1099 forms.
Which States Are Participating in 2025?
For the 2025 tax season, IRS Direct File will be available to residents of the following 24 states:
- Alaska
- Arizona
- California
- Connecticut
- Florida
- Idaho
- Kansas
- Maine
- Maryland
- Massachusetts
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- Oregon
- Pennsylvania
- South Dakota
- Tennessee
- Texas
- Washington
- Wisconsin
- Wyoming
More states are expected to join in subsequent years, and residents of states not yet participating may still use other IRS services like Free File or other available state-specific options.
Eligibility for IRS Direct File
To use IRS Direct File, taxpayers must meet certain eligibility requirements. The program is generally aimed at simplifying tax filing for middle- and lower-income Americans. Here’s a breakdown of who can use Direct File:
- Income requirements: There are no strict income limitations, but the service is tailored for individuals with relatively simple tax situations, such as W-2 wage income, Social Security income, and limited 1099 income.
- Residency: You must have lived in one of the participating states for the entire tax year.
- Types of income covered: Direct File supports income from W-2 forms, 1099-INT for interest income over $1,500, SSA-1099 for Social Security, and 1099-R for retirement income. It also supports various tax credits, including the Earned Income Tax Credit (EITC), Child Tax Credit, and Retirement Savings Contributions Credit
Key Features of Direct File in 2025
- Free Filing: Taxpayers in the participating states can file their federal tax returns for free. State tax returns are not included, but the system will guide users to state-supported options for filing their state returns.
- Simple, Secure Filing: The IRS Direct File tool is designed to be straightforward and easy to use, providing a secure environment for taxpayers to file directly with the IRS.
- Wide Range of Income Sources: While initially covering mostly W-2 and Social Security income, the 2025 version of Direct File will also accommodate 1099 income, including retirement and unemployment compensation.
- Credits and Deductions: Taxpayers can claim important credits like the Premium Tax Credit, Credit for the Elderly or Disabled, and Child and Dependent Care Credit.
| State Participation | 24 States (e.g., California, Texas, New York, Florida) |
|---|---|
| Types of Income Supported | W-2, SSA-1099, 1099-R, 1099-INT, etc. |
| Key Tax Credits | EITC, Child Tax Credit, Dependent Care Credit |
| Cost | Free for eligible taxpayers |
| Filing Start Date | Early 2025 |
| Federal Returns Only | Yes (guidance provided for state returns) |
How to Use IRS Direct File
To use IRS Direct File, eligible taxpayers will need to:
- Create an Account: Access the IRS Direct File system via the IRS website. You may need to verify your identity using ID.me.
- Prepare Your Documents: Gather all necessary tax documents, including W-2s, 1099s, and Social Security statements.
- Follow the Filing Process: Use the tool to enter your tax information and claim any relevant credits and deductions. The system will guide you through each step of the filing process.
Conclusion
IRS Direct File’s expansion to 24 states for the 2025 tax season marks a significant step in making tax filing more accessible and affordable for millions of Americans.
With the ability to file federal tax returns for free, taxpayers in participating states can save on filing fees and avoid the complexity of third-party software.
Keep an eye on the IRS website as the filing season approaches, and make sure you have all the required documents ready to file early.
FAQs
1. Who is eligible for IRS Direct File in 2025?
Taxpayers living in one of the 24 participating states for the entire year are eligible. The tool covers common income types like W-2 wages, Social Security, and 1099 forms.
2. Is Direct File free for everyone?
Yes, the Direct File tool is free for eligible taxpayers, but it only supports federal tax returns. You’ll be guided to state-specific options for state tax filing.
3. What types of tax returns does Direct File support?
Direct File supports returns with W-2, Social Security, and 1099 income, along with several tax credits like the Earned Income Tax Credit and Child Tax Credit.
4. Can I file my state taxes through Direct File?
No, Direct File only handles federal tax returns. However, the system provides links to state-supported filing options after you finish your federal return.
5. When does the 2025 filing season start?
Direct File will be open for filing in early 2025, covering tax year 2024 returns.
References
- IRS Press Release on Free Tax Filing Options in 2025
- IRS.gov – Direct File Expansion in 2025
- U.S. Department of the Treasury – Direct File Announcement for 2025
