Early this year, the Internal Revenue Service rolled out a new program called Direct File, a free tax tool that eligible taxpayers can use to file their federal taxes directly with the IRS. Currently, it is geared primarily towards assisting taxpayers with less complex tax situations and is only available to taxpayers in certain states.
Following a successful pilot program in 2024 with positive feedback from a variety of partners, the IRS announced that it will make the online filing program a permanent option. IRS Direct File will be open for filing in early 2025, expanding to 24 participating states and offering additional features, making this option available to more taxpayers.
Eligibility
You are eligible to use Direct File if you live in a participating state and have certain types of income, credits and deductions. The Eligibility Checker will be available later this fall to help you find out if Direct File is right for you in 2025.
Only the following types of income, deductions, and credits are supported by IRS Direct File:
- Income – W-2 wage income, SSA-1099 Social Security income, 1099-G unemployment compensation, 1099-INT interest income, 1099- R retirement income, and 1099-MISC for Alaska residents reporting the Alaska Permanent Fund Dividend
- Deductions – Standard deduction, student loan interest, educator expenses, health savings account
- Credits – Earned Income Tax Credit, Child Tax Credit, Credit for Other Dependents, Child and Dependent Care Credit, Premium Tax Credit, Credit for the Elderly or the Disabled, Retirement Savings Contributions Credit
Taxpayers with other types of income such as gig economy, rental, or business income are not eligible to use Direct File. Taxpayers who itemize their deductions, as opposed to taking the standard deduction, are also not eligible to use Direct File.
Filing State Returns
Direct File is limited to federal tax returns only. According to the IRS website, if you need to file a state return, Direct File will guide you to a state-supported preparation and filing tool after you have finished your federal return.
Direct File is currently only an option for taxpayers that lived in one of the following states during all of 2024:
- Alaska, Arizona, California, Connecticut, Florida, Idaho, Kansas, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin, and Wyoming
Pennsylvania Applicability
Governor Josh Shapiro announced over the summer that Pennsylvania would be amongst the list of states joining the IRS Direct File program for filing season 2025. Direct File will build on Pennsylvania’s state income tax filing portal.
After filing federal returns on Direct File, qualifying taxpayers will be directed to Pennsylvania’s myPATH system, where they will be able to file and complete their 2024 Pennsylvania state returns. Some information will automatically be uploaded from the federal return to the state return to help save time.
If you meet the eligibility requirements above and are interested in saving money on tax preparation fees, please visit https://www.irs.gov/filing/irs-direct-file or reach out to your GYF executive for more information on Direct File.
