IRS Direct File to Cover More States and Tax Situations

News October 03, 2024 at 05:16 PM
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The IRS building in Washington

The Internal Revenue Service said Thursday that Direct File will be available for the 2025 tax filing season in double the number of states than last year's pilot and also cover a wider range of tax situations.

For the 2025 tax filing season, eligible taxpayers in 24 states will be able to use Direct File: 12 states that were part of the pilot last year, plus 12 new states where Direct File will be available in the upcoming filing season, the IRS said.

Direct File will also "cover a wider range of tax situations, greatly expanding the number of taxpayers eligible to use the free e-filing service," according to the agency.

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 filing season.

"During the pilot last year, 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," the IRS said.

For the 2025 filing season, Direct File will support 1099s for interest income greater than $1,500, retirement income and the 1099 for Alaska residents reporting the Alaska Permanent Fund dividend, the IRS said.

State and Eligibility Expansion

During the pilot last year, Direct File was available in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington State and Wyoming.

For the 2025 tax filing season, Direct File will also be available in Alaska, Connecticut, Idaho, Kansas, Maine, Maryland, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania and Wisconsin.

"In 2025, more than 30 million taxpayers in those 24 states will be eligible to use Direct File," the IRS said.

Additional states could still join Direct File in 2025, the IRS said, "and several states have expressed interest or announced that they will participate in Direct File in 2026."

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