IRS launches pilot program for free online tax filing in 12 states, including Nevada
NEW YORK — After weeks of testing, an electronic system for filing returns directly to the IRS is now available to taxpayers from 12 selected states, including Nevada.
The new system, called Direct File, is a free online tool. Taxpayers in selected states who have simple W-2s and claim a standard deduction may be eligible to use it this tax season to file their federal income taxes. The program will also offer a Spanish version.
“This is a milestone,” said IRS Commissioner Daniel Werfel during a Tuesday press conference to announce the expanded availability of the program. Tax season officially began Jan. 29 and the filing deadline is April 15.
“Direct File marks the first time you can electronically file a tax return directly with the IRS,” Werfel said. “And you can’t beat the price — it’s free.”
The Treasury Department estimates that onethird of all federal income tax returns filed could be prepared using Direct File and that 19 million taxpayers may be eligible to use the tool this tax season. So far, roughly 20,000 people have participated in the pilot, according to the IRS, and expect participation to grow to 100,000 filers in the coming weeks.
Certain taxpayers in Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, Arizona, Massachusetts, California and New York can participate. Direct File can only be used to file federal income taxes; taxpayers who must file state taxes will need to do so separately.
“Direct File will offer millions of Americans a free and simple way to file their taxes, with no expensive and unnecessary filing fees and no upselling, putting hundreds of dollars back in the pocket of working families each year, consistent with President (Joe) Biden’s pledge to lower costs,” said national economic adviser Lael Brainard.
Werfel said a component of the program that enhances filers’ usability is the live chat feature that allows taxpayers to interact with the IRS while they complete their taxes.
The Direct File pilot is part of the agency’s effort to build out a new government service that could replace some taxpayers’ use of commercial tax preparation software, such as Turbotax. It’s meant to be simple and provides a step-by-step walkthrough of easy-to-answer questions.
Derrick Plummer, a spokesman for Intuit, said Direct File “is not free tax preparation but a thinly veiled scheme that will cost billions of taxpayer dollars to pay for something already completely free of charge today.”
Several organizations offer free online tax preparation assistance to taxpayers under certain income limits and fillable forms are available online on the IRS website, but the forms are complicated and taxpayers still have to calculate their tax liability.
Asked whether the Direct File program will likely be built out and available in the 2025 filing season, Werfel said: “I don’t want to prematurely reach a conclusion,” he said, but positive reports from users “have been encouraging.”