The Internal Revenue Service announced the large-scale launch of the innovative Direct File pilot program and encouraged eligible taxpayers in 12 states to try the new service to file their tax returns online for free and directly with the IRS.
The pilot effort has been in testing mode for several weeks, allowing early users to file their 2023 federal tax returns online for free and directly with the IRS. Thousands of taxpayers have successfully used the system, and early users are giving positive reviews to the new option.
Following the initial success of Direct File, the IRS is moving the pilot program out of the testing phase, allowing all eligible taxpayers in the 12 states (representing 19 million taxpayers) to use the system at any time. Taxpayers can log in to Direct File to start their return and complete it anytime before the April filing deadline.
“The early results from Direct File have shown that taxpayers like the ease and convenience of the tool, and moving toward the large-scale launch of the pilot will give more taxpayers the opportunity to use this free option,” said IRS Commissioner Danny Werfel. “Expanding Direct File as the tax deadline approaches will give more taxpayers a way to file their return directly with the IRS for free and will provide us with more valuable information to evaluate this pilot.
For those who have not yet filed their taxes in these 12 states, we encourage them to visit IRS.gov and see if Direct File is the right option for them.”
Direct File is one of many options taxpayers have to file their taxes, including tax software and tax professionals. For the pilot, the IRS created a simplified way for people with simpler tax situations to file their returns directly with the agency.
“A team of experts from across the government created and tested the Direct File pilot program to give taxpayers an easy, accurate, and free way to file their taxes online directly with the IRS,” Werfel added. “Our goal with the Direct File pilot is to help people meet their tax obligations in the easiest and fastest way possible. We developed Direct File from the ground up with taxpayer input, and we will continue talking to taxpayers about their experience to learn more about what they want for future digital services.”
Direct File guides the taxpayer through the complexities of the country’s tax code to easily complete their filing with an accurate calculation of their refund or tax owed.
Direct File is designed to be easy to use for taxpayers.
At each step, it shows the work behind the calculations so users can be confident that their tax return is complete and accurate. Once taxpayers start their return on the Direct File site, they can pause and then securely log back in to finish anytime before the April filing deadline.
Users can also get assistance from special IRS customer service representatives through Direct File’s live chat feature. Like other e-filing options, Direct File typically allows taxpayers to receive their refund in less than 21 days when choosing direct deposit.
“We’ve received excellent initial feedback from the thousands of taxpayers who used it during testing,” said Werfel. “Many of the taxpayers we’ve heard from filed their taxes in less than 30 minutes through Direct File and praised it as an easy and cost-free tax filing experience.”
Who is eligible?
Taxpayers in 12 pilot states who meet certain requirements can use Direct File until the April tax deadline. The pilot states include:
- Arizona
- California
- Florida
- Massachusetts
- Nevada
- New Hampshire
- New York
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
After completing their federal returns, taxpayers in states with a state income tax (Arizona, California, Massachusetts, and New York) will be guided to a state-sponsored tool to complete their state tax returns.
The IRS designed the pilot to follow best practices for launching a new technology platform by starting small, ensuring it works, and then building from there. The pilot is intentionally limited to cover relatively straightforward tax situations.
The Direct File pilot program is an option for taxpayers in these categories:
- Reporting income earned from jobs that generate a W-2 Form, including taxpayers with more than one W-2 job;
- Claiming the Earned Income Tax Credit, Child Tax Credit, and Credit for Other Dependents;
- Claiming the standard deduction and deductions for educator expenses and student loan interest;
- Lived in the same state for the entire 2023 calendar year.
Interested taxpayers can visit directfile.irs.gov, where they can determine if they are eligible. Using Direct File requires identity verification through ID.me. Once their identity is verified and they have securely logged in to Direct File, they will provide their tax information directly to the IRS, not to a third party.
For taxpayers who visit Direct File but are not eligible for the pilot program, they will be directed to Free File on IRS.gov. Now in its 22nd season, taxpayers nationwide can access free software products provided by the IRS’s trusted Free File partners. Through this public-private partnership, tax preparation and filing software providers make their online products available to eligible taxpayers. Eight private-sector Free File partners offer guided online tax software products this year to any taxpayer with an adjusted gross income (AGI) of $79,000 or less in 2023. Free access to online products is available starting from the IRS Free File.
Direct File Pilot for the 2024 Tax Filing Season
The IRS launched the Direct File pilot for the 2024 tax filing season. The Inflation Reduction Act directed the IRS to study the interest and feasibility of creating a direct e-filing tool that taxpayers could use to prepare and file their federal tax returns. The IRS commissioned an independent study, which indicated broad interest in such a system, which the IRS detailed in a Direct File Report to Congress in May 2023.
Shortly after that report, following instructions from the Treasury Department, the IRS assembled a team of tax experts, technologists, engineers, and strategists from across the government to build the Direct File system. The IRS worked closely with the U.S. Digital Service and the General Services Administration’s 18F technology office to create and test Direct File.
Initial testing began in early February 2024 with a handful of federal and state government employees, followed by brief periods of open availability for more taxpayers to start their returns. On March 4, the IRS announced that Direct File would enter the final testing phase, which included an allocation of available slots and added more slots each day. Direct File is now open to all eligible taxpayers in pilot states to decide if it is the right option for them to file their 2023 federal tax returns online for free, directly with the IRS.
Image: IRS
