IRS Direct File Will Return to Florida and 23 Other States in 2025 with Expanded Services

WASHINGTON – The IRS is expanding its program that allows you to file tax returns directly at the office for free.

The federal tax collector’s Direct File program, which allows taxpayers to calculate and submit their returns directly to the government without using commercial tax preparation software, will be available to more than 30 million people in 24 states during the 2025 filing season.

The program was piloted for the 2024 tax season in 12 states.

Now, IRS Commissioner Daniel Werfel says the program will be permanent and the IRS will expand taxpayer eligibility.

“We are announcing significant expansions to Direct File that will make the service available to millions more taxpayers in 2025,” Werfel said during a call with reporters on Thursday. He said it’s possible that additional states could still join the program in 2025.

The 2024 pilot program allowed people in some states with very simple W-2 forms to calculate and submit their returns directly to the IRS. The IRS said people using the program have requested refunds of more than $90 million.

It was originally available to certain taxpayers in California, New York, Arizona, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming and Massachusetts.

States that will be added in 2025 are: Alaska, Connecticut, Idaho, Kansas, Maine, Maryland, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania and Wisconsin.

Additionally, the new eligibility standards will allow taxpayers with 1099 income and credits to participate, including, but not limited to, the Child and Dependent Care Allowance, the Retirement Contribution Credit and the Health Savings Account Deduction.

“Other countries have been providing their citizens with the ability to do these types of things for years,” Deputy Treasury Secretary Wally Adeyemo said on a call with reporters. Several countries in the Organization for Economic Co-operation and Development, including Germany and Japan, have similar systems with pre-filled tax forms.

The idea of ​​direct file is not viewed favorably by commercial tax preparation software companies, which have made billions of dollars charging fees for use of their software.

Additionally, this week’s IRS Inspector General Report noted that the IRS failed to provide sufficient data protection safeguards in connection with the IRS Free File Alliance. The alliance is a multi-year arrangement between the IRS and certain commercial tax preparation firms to provide free tax preparation services to low- and moderate-income taxpayers.

Free File Alliance is independent from Direct File.

The IRS was tasked with studying how to create a “direct filing” system with money received as part of the Inflation Reduction Act signed by President Joe Biden in 2022. The IRS was given nine months and $15 million to report on how such a program would work.