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Millions More People Can Now File Taxes Directly to the IRS — for Free. Here’s How
By Adam Hardy MONEY RESEARCH COLLECTIVE
IRS Direct File is back again this year with significantly expanded eligibility despite confusion over whether Elon Musk had “deleted” it. (He didn’t.)
This tax season, millions more Americans will be eligible to file their federal taxes for free using the IRS’s new Direct File software.
Though Tax Day is more than three months away, the IRS is already accepting federal returns from taxpayers in 25 states, an increase of 13 states since the Direct File program was piloted last tax season.
This year, Direct File opened on Jan. 27, at the official start of the 2025 tax season. The government-run tool, which works similarly to typical commercial tax filing software, is currently intended for taxpayers with simple tax situations. (There are several limitations based on income, type of tax credits claimed and several other factors, for instance. More on eligibility below.)
The Direct File program was born out of the Inflation Reduction Act, a sprawling 2022 law that mandated the IRS study the feasibility of a federally run free tax filing system. Last year, the IRS piloted the new program, and about 140,000 taxpayers used it to file their federal returns directly to the IRS at no cost.
It’s back again this year with significantly expanded eligibility despite confusion over whether Elon Musk, the multibillionaire head of the Department of Government Efficiency, or DOGE, had “deleted” the program while trying to trim federal spending. (He didn’t.)
The Treasury Department and the IRS did not respond to Money’s request for comment Wednesday about Direct File and Musk’s remarks. But during his confirmation hearing last month, Treasury Department Director Scott Bessent promised to keep Direct File running for, at least, the 2025 tax season.
“I will commit that for this tax season, the Direct File will be operative,” he said, adding that afterward he would “consult and study” the program before deciding its future.
Note: Direct File is different from IRS Free File, a long-running tax filing partnership the government has with third-party tax companies; this separate initiative is still available to anyone who made $84,000 or less in 2024.
Here’s what to know about using Direct File to prepare your federal income taxes.
IRS Direct File: What’s new in 2025
The IRS says its free Direct File program has several new features this year, including the ability to import tax and income information directly from your IRS account as opposed to relying on your employer for your W-2.
The agency added another customer service option, too. A chat bot can now walk you through the various eligibility requirements. Live IRS agents are available again this year to assist with Direct File questions in both English and Spanish.
Starting in March, the IRS says it plans to add the ability to process 1099-R forms with Direct File. Before then, taxpayers who took distributions from their retirement account (and thus need to upload 1099-Rs) aren’t eligible to use the software.
And, of course, residents in 13 additional states can now use the program this year.
IRS Direct File eligibility requirements
The main qualifier for Direct File is location. The program is available only to residents of the following 25 states:
- Alaska
- Arizona
- California
- Connecticut
- Florida
- Idaho
- Illinois
- Kansas
- Maine
- Maryland
- Massachusetts
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- Oregon
- Pennsylvania
- South Dakota
- Tennessee
- Texas
- Washington state
- Wisconsin
- Wyoming
While these states are home to more than two-thirds of the nation’s population, not all of their residents are eligible to use Direct File.
Other major excluding factors are related to income. You won’t be able to use Direct File if your earnings for 2024 exceed $200,000 (or $160,200 if you had more than one employer). For married taxpayers filing separately, your wages can’t exceed $125,000, and total wages for joint filers can’t exceed $250,000.
That income must also come from one of the following sources:
- W-2 earnings from an employer
- 1099-G (unemployment benefits)
- SSA-1099 (Social Security benefits)
- 1099-SA (distributions from Health Savings Accounts)
- 1099-INT (for interest)
- Alaska Permanent Fund Dividend
This stipulation excludes gig workers, freelancers, landlords and more.
Lastly, Direct File doesn’t accommodate itemized deductions, and only a handful of tax credits can be claimed:
- Earned income tax credit
- Child tax credit
- Credit for other dependents
- Child and dependent care credit
- Premium tax credit
- Credit for the elderly and disabled
- Retirement savings contribution credits
The IRS estimates that about 30 million taxpayers meet the requirements to use Direct File this year.
How to use IRS Direct File
If you’ve ever used tax software like TurboTax or H&R Block, using IRS Direct File should feel familiar.
First, start at Directfile.irs.gov. Review the eligibility requirements on the landing page to ensure that your federal tax return will be accepted. If you meet the requirements outlined above, you will then be prompted to create an ID.me account (assuming you did not use Direct File last year).
Registering with ID.me, an identity verification service, requires your name, email, Social Security number, government-issued ID or passport. ID.me will need to verify that your face matches your ID. You can choose to do this via facial recognition software or video chat with a representative. In-person verification is also possible.
Once your ID.me account is set up, you can return to the Direct File website to input your tax information.
Follow the guided prompts to file your federal tax return while referencing your W-2 and 1099s, if any. The IRS’s software asks simple step-by-step questions and gives you references to where you can find various data points on your documents. Assistance is available via online chat or by calling 800-829-1040.
At the end of the prompts, the IRS will estimate the amount of your tax refund (or tax bill) and give you a chance to change anything before officially submitting. If you’re receiving a refund, you can select whether you want it direct deposited or sent by check through the mail. There are several options to pay your tax bill, as well.
From there, you can stay up to date on your refund status by using the IRS’s refund-tracking tool called Where’s My Refund?
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Adam Hardy is Money's lead data journalist. He writes news and feature stories aimed at helping everyday people manage their finances. He joined Money full-time in 2021 but has covered personal finance and economic topics since 2018. Previously, he worked for Forbes Advisor, The Penny Hoarder and Creative Loafing. In addition to those outlets, Adam’s work has been featured in a variety of local, national and international publications, including the Asia Times, Business Insider, Las Vegas Review-Journal, Yahoo! Finance, Nasdaq and several others. Adam graduated with a bachelor’s degree from the University of South Florida, where he studied magazine journalism and sociology. As a first-generation college graduate from a low-income, single-parent household, Adam understands firsthand the financial barriers that plague low-income Americans. His reporting aims to illuminate these issues. Since joining Money, Adam has already written over 300 articles, including a cover story on financial surveillance, a profile of Director Rohit Chopra of the Consumer Financial Protection Bureau and an investigation into flexible spending accounts, which found that workers forfeit billions of dollars annually through the workplace plans. He has also led data analysis on some of Money’s marquee rankings, including Best Places to Live, Best Places to Travel and Best Hospitals. He regularly contributes data reporting for Best Colleges, Best Banks and other lists as well. Adam also holds a multimedia storytelling certificate from Poynter’s News University and a data journalism certificate from the Investigative Reporters and Editors (IRE) at the University of Missouri. In 2017, he received an English teaching certification from the University of Cambridge, which he utilized during his time in Seoul, South Korea. There, he taught students of all ages, from 5 to 65, and worked with North Korean refugees who were resettling in the area. Now, Adam lives in Saint Petersburg, Florida, with his pup Bambi. He is a card-carrying shuffleboard club member.