The Internal Revenue Service (IRS) made an announcement that its Direct File program will become a permanent option for federal tax returns starting in the 2025 filing season. Biden-Harris administration officials said the move is the consequence of a successful pilot program and positive feedback from a wide range of stakeholders.
The IRS is making plans to expand the availability of Direct File so that more taxpayers will be eligible for the next 2025 and beyond, officials commented that the expansion includes from examining ways to cover more tax situations and also inviting all states to partner with the program, more details about the expansion are expected before the year 2025.
A Pilot Program that Went Better Than Expected
The decision comes from a pilot program that proved to be extremely successful throughout the 2024 tax filing season, in which 140,803 taxpayers from 12 states made use of Direct File, the IRS collected and analyzed data from the pilot program, held numerous meetings with stakeholders, and received feedback from users, state officials, and representatives from across the tax landscape.
Many of the organizations, more than a hundred members of Congress and potential future users provided external comments. While some stakeholders expressed that they believe the current free electronic filing options from third-party providers are sufficient, the IRS found substantial support for Direct File.
Based on the initial analysis after the pilot, the IRS determined that making Direct File permanent was feasible. Commissioner Danny Werfel recommended the move to Treasury Secretary Janet L. Yellen, who accepted.
IRS Taxpayers Extremely Happy With the Direct File Experience
Werfel cited overwhelming user satisfaction and increased ease of filing taxes as key reasons for the recommendation, “The clear message is that many taxpayers across the country want the IRS to provide more than one no-cost option for filing electronically,” Werfel said.
“Starting with the 2025 tax filing season, the IRS will make Direct File a permanent option for filing federal tax returns, give taxpayers additional options, strengthen the tax filing system, add Direct File to the menu of filing options fits perfectly into our effort to make taxes as easy as possible for Americans, including saving time and money.”
Capitalizing on the success of the pilot, which focused on taxpayers with single-quote-unquote tax situations in 12 states, the IRS is testing ways to expand eligibility nationwide.
Where Will Be the IRS Available Next Tax Season?
For the 2025 filing season, the IRS is going to work with all states that want to partner with Direct File. There is no limit to the number of participating states. Several new states are expected to approach and become part of the program.
The IRS also plans to gradually expand the range of tax situations supported by Direct File, in the coming years, officials said the goal is to adapt to the most common tax scenarios, focusing on those that affect working families, announcements about new state partners and expanded eligibility are expected soon.
“The user experience, both within the product and in the integration with state tax systems, will continue to be the basis for Direct File moving forward,” Werfel said. “The accuracy and comprehensive acceptance of the tax credit will be paramount concerns to ensure taxpayers file an accurate return and get the refund to which they are entitled. Improving the tax filing experience and helping taxpayers fulfill their obligations as easily and quickly as possible will be our guiding principles.”
