The IRS announced a significant expansion of its Direct File program for the 2025 tax filing season, doubling the number of states and increasing the range of tax situations covered. The initiative, which allows taxpayers to file their taxes electronically for free, aims to improve the overall tax-filing experience and make it more accessible to millions of Americans.
Expanded State Availability
For the 2025 tax season, Direct File will be available in 24 states, a major increase from the 12 states in the 2024 pilot program. The new states include Alaska, Connecticut, Idaho, Kansas, Maine, Maryland, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, and Wisconsin, joining the original states like California, Florida, and New York.
This expansion means that more than 30 million taxpayers will be eligible to use Direct File in 2025, with the possibility of additional states joining before the tax season opens.
New Tax Situations Covered
In addition to geographic expansion, the IRS is widening the range of tax situations covered by Direct File. New for 2025, taxpayers can report interest income over $1,500, retirement income, and Alaska Permanent Fund dividends. Credits like the Child and Dependent Care Credit, Premium Tax Credit, and Credit for the Elderly and Disabled will also be supported.
The IRS is committed to expanding Direct File’s capabilities over time, with a focus on working families and other common tax scenarios. This gradual expansion aims to support most tax situations in the coming years.
New Features for Easier Filing
In 2025, Direct File will feature enhancements to improve user experience. Taxpayers can interact with a new chatbot to assist in navigating the system and eligibility checks. As with the pilot, live chat support will be available in both English and Spanish. Additionally, users can opt into extra authentication measures for more detailed customer service assistance.
The IRS is also refining Direct File’s integration with state tax systems, making it easier for taxpayers to complete both their federal and state filings in one streamlined process.
Long-Term Vision for Direct File
After a successful pilot, where 140,000 taxpayers used Direct File in 2024, the IRS decided to make the program a permanent feature of the U.S. tax system. The agency is also working with other states interested in joining for the 2026 season and beyond.
Direct File will complement other tax filing methods, such as Free File, Volunteer Income Tax Assistance (VITA), and the Tax Counseling for the Elderly (TCE) programs. The IRS’s goal is to provide taxpayers with multiple free or low-cost options to meet their tax filing needs efficiently.
A More Accessible Tax System
IRS Commissioner Danny Werfel emphasized that Direct File is a key part of a broader effort to make the tax system more accessible. By offering more free options and expanding coverage, the IRS is making it easier for taxpayers to fulfill their obligations while ensuring they claim all the credits and deductions to which they’re entitled.
As the IRS continues to refine and expand Direct File, it is positioning itself to meet taxpayers where they are, offering electronic filing options that are convenient, free, and reliable.
The IRS Direct File program’s expansion for the 2025 filing season marks a significant step toward simplifying tax filing for millions of Americans. With its broader availability, support for more tax situations, and user-friendly features, Direct File is set to become a valuable tool for those looking for a hassle-free and free tax filing experience.