IRS Direct File: Taxpayer Pilot Program Becomes Permanent

The Internal Revenue Service is giving taxpayers another option when it comes to filing their taxes.

The government agency recently announced that it is making the Direct File pilot program permanent. When it launched earlier this year, Direct File allowed eligible taxpayers in select states to file their taxes directly to the IRS using software developed by the agency.

At that time, free filing services were available to taxpayers in Arizona, California, Florida, Massachusetts, New Hampshire, New York, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming. Taxpayers in these states were eligible if they had simple returns, gig or business income, itemized deductions or credits such as Child and dependent care credit either saver’s credit.

The IRS said in its announcement that it is exploring ways to expand direct filing by covering more tax situations and inviting all states to participate in the program. Several states are expected to be selected.

Direct file taxpayers reported a largely positive experience, according to an IRS survey of more than 15,000 participants. Ninety percent of respondents said their experience was excellent or above average. They especially liked that the software was easy to use, reliable and free. About half said they paid for tax preparation in the previous year.

The agency said it plans to expand Direct File to support the most common tax situations “with a particular focus on situations that affect working families.” Taxpayers can expect to hear more about new states joining the program, in addition to expanded eligibility, in the coming months.

“The clear message is that many taxpayers across the country want the IRS to provide multiple, no-cost options for electronic filing,” said IRS Commissioner Danny Warfel.