The Internal Revenue Service (IRS) of the United States announced last week that a new free electronic system will be available for taxpayers in 24 states to file their federal tax returns starting in the 2025 tax season.
After a pilot test conducted in 12 states in 2023, the IRS is making the free Direct File tool available to taxpayers in more states for the upcoming tax filing season, an option that can be used by more than 30 million users, according to a press release published by the agency.
During the pilot test conducted in the 2024 tax filing period, more than 140,000 taxpayers in 12 states used Direct File, a number that will double in the upcoming season.
Direct File is a web-based service that works on mobile phones, laptops, tablets, or desktop computers, and guides taxpayers, step by step, in preparing their federal tax return.
After the taxpayer completes their federal tax return, the Direct File program automatically guides them to the state tools to file their state tax return.
In last year's pilot test, IRS customer service representatives provided assistance to thousands of users through a live chat feature of this system, in English and Spanish.
According to the IRS, for the upcoming tax filing season, this tool will include "new features to make tax filing faster and easier." Among these is a new chat bot that will be able to guide users through the eligibility checker.
The agency announced that live chat will be available again, in English and Spanish, and taxpayers will be able to opt for additional authentication and verification, allowing customer service representatives to provide more information.
"We are excited about the improvements to Direct File and the millions of additional taxpayers who will qualify to use the service this year," said IRS Commissioner Danny Werfel to Telemundo.
Werfel stated that the purpose is "to improve the experience of filing taxes," while also "helping taxpayers fulfill their obligations quickly and easily."
These are the states that will be able to use Direct File.
For the 2025 tax filing season, more than 30 million taxpayers will be eligible to use the Direct File system, the IRS noted on its website. The tool will be available to eligible taxpayers in 24 states.
Florida, with a large Hispanic-origin population, prominently featuring the Cuban community, is included among the states where this option can be used. New York, New Jersey, Connecticut, Arizona, California, Massachusetts, Nevada, New Hampshire, South Dakota, Tennessee, and Texas are also listed.
Additionally, Washington, Wyoming, Alaska, Idaho, Kansas, Maine, Maryland, New Mexico, North Carolina, Oregon, Pennsylvania, and Wisconsin.
The IRS also reported that other states could still join the Direct File system in 2025, while several have expressed interest or announced that they will participate in this program in 2026.
Find out what tax situations Direct File covers.
In addition to doubling the number of states where Direct File will be available, the service will also cover a wider range of tax situations for the 2025 tax filing season, the IRS noted.
"During last year's pilot, Direct File covered limited tax situations, including wage income reported on a W-2 form, Social Security income, unemployment compensation, and certain credits and deductions," he specified.
According to the agency, during the 2025 tax season, Direct File will accept 1099 forms for interest income exceeding $1,500, retirement income, and the 1099 form for Alaska residents reporting the Alaska Permanent Fund dividend.
During the pilot program, Direct File provided support to taxpayers requesting the Earned Income Tax Credit, the Child Tax Credit, and the Credit for Other Dependents, the IRS indicated.
In 2025, Direct File will also cover users applying for the Child and Dependent Care Credit, the Premium Tax Credit, the Credit for the Elderly and Disabled, and the Credits for Contributions to Retirement Savings.
In addition to covering taxpayers who request the standard deduction and deductions for student loan interest and education expenses, the program will provide support to those who request deductions for Health Savings Accounts.
The IRS announced that in the coming years it will gradually expand the reach of Direct File "to support the most common tax situations, focusing particularly on those affecting working families."
Direct File will start receiving tax returns once the 2025 filing season opens.
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