The IRS said Thursday it will make permanent the free electronic tax return filing system that it experimented with this year and is asking all 50 states and the District of Columbia to help taxpayers file their returns through the program in 2025.
The IRS tried the Direct File project for the 2024 tax season on a limited basis in 12 states for people with very simple W-2s, the employee’s wage and tax statement.
The agency also is inviting all states with a state income tax to sign up and help people file their state returns for free. During the 2024 pilot, tax agencies in Arizona, Massachusetts, California and New York helped people directly file their state taxes.
Very simple returns. Fillers couldn’t even participate if they had child care deductions. I hope they scale out capabilities too along with this expansion.
And not to sound too pessimistic, but I doubt we’ll get participation in all 50 states by 2025, since those tax rules need to be added to the system as well. It sounds quite complicated for a one year project. So just some expectation management in this one. Fingers crossed.
Well the IRS doesn’t manage state filing IIRC, so if that’s the case you would need your state to provide that.
And, each of the states could work together in some sort of federation to provide a unified interface for state-level filing.