Following extensive testing, an electronic system for submitting tax returns directly to the IRS is now accessible to taxpayers in 12 specific states.
The new system, known as Direct File, is a no-cost online tool. Eligible taxpayers in the designated states with straightforward W-2s and who claim the standard deduction can potentially utilize this tool during the current tax season to file their federal income taxes. The program will also feature a Spanish version, launching at 1 p.m. Eastern Time on Tuesday.
The Treasury Department anticipates that around one-third of all federal income tax returns filed could be completed using Direct File, with an estimated 19 million taxpayers eligible to utilize the tool this tax season.
“Direct File will provide millions of Americans with a free and uncomplicated method to file their taxes, eliminating costly and unnecessary filing fees and upselling, ultimately saving working families hundreds of dollars annually, aligning with President Biden’s commitment to reducing expenses,” stated National Economic Advisor Lael Brainard.
Residents of Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, Arizona, Massachusetts, California, and New York are eligible to participate. Direct File is exclusively for filing federal income taxes; taxpayers in states that mandate filing state taxes will need to do so separately.
The Direct File pilot initiative is part of the agency’s initiative to establish a new government service that could potentially replace some taxpayers’ usage of commercial tax preparation software like TurboTax. It is designed to be user-friendly and offers a guided walkthrough with straightforward questions.
