NEW YORK CITY - IRS' Direct File program, which allows taxpayers to file their taxes for free and online, will now be a permanent option for users for the 2025 season across all 50 states and Washington D.C., the Treasury Department announced.
The Direct File pilot program was first rolled out earlier this year on a limited basis, seeing 140,000 taxpayers claiming more than $90 million in refunds and saving an estimated $5.6 million in filing costs.
Now, due to its popularity, the program will be released to the mainstream for the upcoming tax season, allowing filers with relatively straightforward returns— like W2s or Social Security income— and who take the standard deduction to file their taxes free online. Other types of income, like those from gig work or other business returns, are not eligible.
"President Biden is committed to saving Americans time and money and ensuring families receive the tax benefits they're owed. Providing a free tool to all Americans who want the option to file directly with the URS is key to achieving those goals," Treasury Secretary Janet Yellen said in a statement.
"After a successful pilot, we are making Direct File permanent and inviting all 50 states to offer this free filing option to their residents. The Treasury Department and IRS look forward to working with states to expand Direct File to Americans across the country," she continued.
Democratic lawmakers and other advocates are championing the decision as some have long called for a program to reduce or even eliminate the cost of filing, especially in the digital age. Nevertheless, Direct File is not a required government program, and it will not replace existing filing services, NBC News reports.
National Economic Adviser Lael Brainard applauded the Biden administration, saying their "investment in modernizing the IRS is already paying off, and we're looking forward to this resource being available to more Americans across the country."
On the other hand, for filers subject to income taxes, their state must opt in to Direct File. Twelve states have already signaled opposition to doing so, echoing complaints by TurboTax parent Intuit that Direct File is a waste of taxpayer resources, despite a White House survey revealing that 90% of respondents ranked their experience with Direct File as "excellent" or "above average," NBC News reports.
Taxpayers Protection Alliance spokesperson Kara Zupkus is denouncing the decision, arguing the program will increase the IRS's authority and scope and have "devastating consequences."
"This is a solution in search of a problem," she said. "The only result here will be more delays and less money in the pocketbooks of hard-working Americans."
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