IRS Expands Direct File Nationwide Starting in 2025 Tax Season

The Internal Revenue Service (IRS) has announced that Direct File, a free electronic tax filing service, will become a permanent option starting in the 2025 tax season. This decision follows a successful pilot program during the 2024 filing season and extensive feedback from various stakeholders.

The IRS is planning to expand Direct File’s availability, making it accessible to more taxpayers and covering a wider range of tax situations. The agency will also invite all states to partner with Direct File for the upcoming tax season. Additional details on these expansions are expected to be released in the coming months.

During the 2024 pilot, 140,803 taxpayers across 12 states used Direct File to submit their taxes. The IRS collected and analyzed data, engaged with numerous stakeholders, and received feedback from individual users, state officials, and representatives from across the tax community. Feedback was overwhelmingly positive, with 90% of users rating their experience as “Excellent” or “Above Average.” Many users highlighted the ease of use, trustworthiness, and cost-free nature of the service. The pilot’s success has led IRS Commissioner Danny Werfel to recommend making Direct File a permanent option, a recommendation accepted by Treasury Secretary Janet L. Yellen.

“The clear message is that many taxpayers across the nation want the IRS to provide more than one no-cost option for filing electronically,” said IRS Commissioner Werfel. “Starting with the 2025 filing season, the IRS will make Direct File a permanent option for filing federal tax returns. Giving taxpayers additional options strengthens the tax filing system and fits squarely into our effort to make taxes as easy as possible for Americans, including saving time and money.”

As part of its expansion plans, the IRS aims to work with any interested states to integrate their tax systems with Direct File. The goal is to gradually support most common tax situations, particularly those impacting working families.

During the pilot, Direct File users saved significant time and money. Filing typically took less than an hour, and many users reported completing their returns in just 30 minutes. The Treasury Department estimates that Direct File users saved a combined $5.6 million in tax preparation fees.

The IRS plans to leverage the insights gained from the pilot to further enhance the service. Innovations such as integrated Live Chat support will continue to be explored to improve taxpayer experience and service efficiency.

Direct File will be one of several free filing options available to taxpayers, alongside services provided by tax professionals and commercial software. The IRS remains committed to partnerships with third-party vendors and programs like Free File, the Volunteer Income Tax Assistance program (VITA), and the Tax Counseling for the Elderly program (TCE).

As the IRS continues to expand and refine Direct File, it will also focus on ensuring the accuracy of tax returns and maximizing the uptake of tax credits. This expansion is part of the IRS’s broader effort to improve digital services and taxpayer experience.