Following weeks of rigorous testing, a new electronic system, Direct File, is now accessible to taxpayers hailing from 12 chosen states, enabling them to submit returns directly to the IRS.
Direct File, a cost-free online tool, caters to taxpayers in selected states with straightforward W-2s and standard deduction claims, offering them the opportunity to file their federal income taxes for the ongoing tax season. A Spanish version of the program will also be rolled out, commencing at 1 p.m. Eastern Time on Tuesday.
IRS Commissioner Daniel Werfel hailed this development as a significant milestone during a press conference held on Tuesday to unveil the program’s expanded availability. With tax season officially underway since January 29 and the filing deadline set for April 15, Werfel emphasized the groundbreaking nature of Direct File, marking the first instance of electronic filing directly with the IRS, and underscored its no-cost nature.
According to the Treasury Department, approximately one-third of all federal income tax returns could potentially be prepared using Direct File, with an estimated 19 million taxpayers eligible to utilize the tool this tax season. Participation in the pilot program has already seen around 20,000 individuals involved, with expectations of this figure rising to 100,000 filers in the coming weeks, as per the IRS.
Residents of Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, Arizona, Massachusetts, California, and New York are eligible to participate. However, Direct File solely facilitates the filing of federal income taxes; taxpayers from states mandating the filing of state taxes must do so separately.
National Economic Advisor Lael Brainard hailed Direct File as a means to provide millions of Americans with a free and uncomplicated tax-filing process, aligning with President Biden’s commitment to reducing costs for working families.
Enhancing user experience, the program features a live chat function allowing taxpayers to engage with the IRS while completing their taxes.
The Direct File pilot initiative forms part of the IRS’s endeavor to introduce a new government service potentially replacing some taxpayers’ reliance on commercial tax preparation software like TurboTax. It offers a straightforward, step-by-step guide through easily answerable questions.
In response to concerns raised by Derrick Plummer, a spokesperson for Intuit, regarding the program’s purported unnecessary cost, Werfel refrained from making premature conclusions but cited positive feedback from users as encouraging indicators for potential future expansion and availability in the 2025 filing season.
