The IRS said Thursday it will make permanent the free electronic tax return filing system that it experimented with this year and is asking all 50 states and the District of Columbia to help taxpayers file their returns through the program in 2025, according to a report from the Associated Press.
The IRS tried the Direct File project for the 2024 tax season on a limited basis in 12 states for people with very simple W-2s, the employee’s wage and tax statement.
The agency also is inviting all states with a state income tax to sign up and help people file their state returns for free. During the 2024 pilot, tax agencies in Arizona, Massachusetts, California, and New York helped people directly file their state taxes.
IRS Commissioner Danny Werfel said the IRS will report later this year on how many states plan to participate in the program in 2025.
The IRS was tasked with looking into how to create a “direct file” system as part of the money it received from the Inflation Reduction Act signed into law by President Joe Biden in 2022. It gave the IRS nine months and $15 million to report on how such a program would work.
Since the Direct File trial began in March, more than 140,000 taxpayers used it to file their tax returns, claiming more than $90 million in refunds, agency officials said.
