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Expanding the Reach of Free, Easy Tax E-Filing

Today, free, online, government-provided tax filing—once an advocate pipe dream—is a reality in 25 states across the country. Following an overwhelmingly popular pilot last year, IRS Direct File now launches for its first full tax season and will be available to up to 32 million American households.
Direct File’s growth is a giant leap forward in improving access to the tax system—and for digital government in general. With Direct File, the IRS has taken responsibility for the front door of the tax system and is endorsing the idea that interacting with government online should be easy and human-centered. Direct File is relaunching with significantly expanded functionality that demonstrates its commitment to access—including the ability for many taxpayers to pre-populate IRS data into their return, which will eventually help us close the tax benefits participation gap.
Today is also a big moment for Code for America, as we announce the concurrent launch of FileYourStateTaxes, our companion state tax filing product for Direct File. We’re thrilled to relaunch this user-friendly, plain-language, bilingual, and mobile-first service in Arizona and in four new states: Idaho, Maryland, New Jersey, and North Carolina. We are proud to be part of the movement bringing Direct File to states across the country, with fully half of states participating in Direct File this year, and a clear path to all 50 in the years to come.
If you’re one of the tens of millions of households eligible to use Direct File this year: we hope you go to directfile.irs.gov and give it a try. We think you’ll love it.
Direct File continues its strategic, iterative development with significant growth in 2025
The American tax code is enormous and complex—and Direct File, like Rome, isn’t getting built in a day. The 2024 pilot was about starting small and getting it right. This year, Direct File is still following tech best practices by building iteratively, expanding sustainably, and prioritizing new functionality in proportion to its cost-benefit.
Chief among Direct File’s new functionality is the holy grail of tax filing reform: pre-populating taxpayers’ data—which the IRS already has on hand—so they don’t have to input it themselves. For years, taxpayers, outside experts, and auditors have made the case for prepopulation. Notably, our research has shown that having to track down and transcribe income documents is the biggest barrier for low-income families claiming tax benefits. With significant new pre-population functionality—dubbed “Data Import” by the IRS—Direct File is taking a huge step toward solving this problem.
This year's functionality is just the first step. But this first step is monumental.
In 2025, Direct File will allow taxpayers to import their basic information (name, date of birth, SSN, address); details used to validate their returns (identity protection PINs and prior-year AGI, which can be serious barriers for low-income taxpayer); and, perhaps most exciting, large portions of their W-2s. This will save taxpayers time and headache and reduce clerical errors that can jeopardize returns. That the IRS is making W-2 pre-population in particular available in 2025 is nothing short of remarkable, and speaks to agency-wide improvements since the Inflation Reduction Act.
This year’s functionality is just the first step. But this first step is monumental. For the first time, the IRS will allow taxpayers to pre-populate income data on their returns, putting Direct File on track to becoming a nearly-automatic tax filing tool.
The taxpayer experience is improving in more subtle ways too, including better data sharing between federal and state tools, and expanded customer service options.
This year, Direct File also features significant expansion in tax scope, with several new income sources, one new deduction, and four new credits supported. All told, using the number of screens in Direct File as a proxy, these expansions roughly double the amount of functionality in the product. (Each marginal improvement is complex to build, even as it’s easy for most taxpayers to use.) Like last year, the Direct File team remains focused on tax provisions everyday Americans use, ensuring the product stays simple and accessible as it grows.
In future years, we hope Direct File continues to center the needs of everyday people as it slowly and sustainably expands tax scope, likely until it matches the tax scope of the VITA program.
Finally, there is Direct File’s most striking expansion: from 12 states to 25. As we’ve said, state tax administration has long been a known challenge of any federal Direct File system. The Direct File team has taken this issue seriously from day one, and Direct File’s growth is a reflection of that investment.
In future years, we hope Direct File continues to center the needs of everyday people as it slowly and sustainably expands tax scope.
What’s next
Despite the recent transfer of power in Washington, D.C., Americans still need—and deserve—access to free, easy, online tax filing. For them, Direct File isn’t a talking point; it’s the key that can unlock transformational tax benefits. Direct File is and always has been a simple and commonsense idea: if the government requires Americans to file a tax return to fulfill their legal obligations and claim critical benefits, then the government should give Americans a free, easy, online way to do so. That’s why over 9 in 10 Americans love the idea of Direct File; 9 in 10 Direct file users loved it; and red, purple, and blue states across the country are eager to join the program.
We’re focused on making sure Direct File and FileYourStateTaxes can deliver the best service possible for American taxpayers, and that eligible taxpayers across the country know about them. We hope to see millions of people use Direct File this year and join us in the belief that government can—and, with Direct File, will—work for everyone in the digital age.