The Internal Revenue Service announced that its Direct File program will become a permanent option for federal tax returns starting in the 2025 tax season. Biden-Harris administration officials said the move follows a successful pilot program and positive feedback from a broad range of stakeholders.
The IRS plans to broaden Direct File’s availability to make more taxpayers eligible by 2025 and beyond. Officials said the expansion includes examining ways to cover more tax situations and inviting all states to partner with the program. Further details on the expansion are expected ahead of 2025.
The decision stems from a highly successful pilot during the 2024 tax season, in which 140,803 taxpayers from 12 states used Direct File. The IRS collected and analyzed data from the pilot, held numerous meetings with stakeholders, and received feedback from users, state officials, and representatives across the tax landscape. Hundreds of organizations, over a hundred members of Congress, and potential future users provided input. While some stakeholders said they believe current free electronic filing options from third-party vendors suffice, the IRS found substantial support for Direct File.
Based on initial post-pilot analysis, the IRS determined that making Direct File permanent was viable. Commissioner Danny Werfel recommended the move to Treasury Secretary Janet L. Yellen, who accepted. Werfel cited overwhelming user satisfaction and improved ease of filing taxes as critical reasons for the recommendation.
“The clear message is that many taxpayers across the nation want the IRS to provide more than one no-cost option for filing electronically,” Werfel said. “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. Adding Direct File to the menu of filing options fits squarely into our effort to make taxes as easy as possible for Americans, including saving time and money.”
Building on the pilot’s success, which targeted taxpayers with relatively simple tax situations in 12 states, the IRS is exploring ways to expand eligibility nationwide. For the 2025 filing season, the IRS will work with all states wishing to partner with Direct File, with no limit on participating states. Several new states are expected to join the program.
The IRS also plans to gradually expand the range of tax situations supported by Direct File. Over the coming years, officials said the goal is to accommodate the most common tax scenarios, focusing on those affecting working families. Announcements about new state partners and expanded eligibility are expected soon.
“User experience—both within the product and integration with state tax systems—will continue to be the foundation for Direct File moving forward,” Werfel said. “Accuracy and comprehensive tax credit uptake will be paramount concerns to ensure taxpayers file a correct return and get the refund they’re entitled to. Improving the tax filing experience and helping taxpayers meet their obligations as easily and quickly as possible will be our guiding principles.”
Officials stated that many taxpayers expressed a desire for no-cost filing options throughout the review process. Millions of taxpayers from non-pilot states visited the Direct File website or requested the service for their state.
Direct File will become a permanent option among the various filing methods available to taxpayers. The IRS said it’s not intended to replace other services offered by tax professionals or commercial software providers, who remain essential partners with the agency. The IRS said it also continues its commitment to Free File Inc., having recently signed a five-year extension with the industry.
As the IRS expands Direct File, other free filing options will be enhanced, including the Volunteer Income Tax Assistance program (VITA) and the Tax Counseling for the Elderly program (TCE).
Post-pilot analysis identified three key conclusions supporting Direct File’s permanent establishment, including, high user satisfaction, a simplified tax filing experience, and a catalyst for digital transformation.
“We’re mindful that the most important decision we made during the pilot was to focus on executional certainty,” Werfel said. “We took the time to get it right. We will apply that same critical lesson for next year as we take a strategic approach to expanding Direct File’s availability and capabilities.”