After piloting a Direct File tax system in 12 states this year, the Internal Revenue Service (IRS) is expanding the service to all 50 states.
During the 2024 tax filing season, the IRS saw close to 141,000 taxpayers use the new, free electronic Direct File system to file their federal tax returns.
Now, that option will become permanent and can be used in place of third party services like TurboTax, QuickBooks and H&R Block.
U.S. Sen. Tom Carper helped to secure funding for the program through the federal Inflation Reduction Act, which provided additional dollars to IRS modernization efforts.
“I want to make sure that people, when they think of the IRS, they think of help, help in finding out what their obligations are – how can they meet those obligations in a reasonable way?" he said.
While Delaware was not among the 12 states that piloted the program during the 2024 season, Carper urged the IRS to make the tax filing system more equitable and accessible for taxpayers.
He explains he ran into similar tax accessibility issues when he was Delaware’s governor, and he believes expanding Direct File nationwide is a step in the right direction.
“People didn’t like the Delaware Division of Revenue, which was like the state version of the IRS, and the service was not very good, we weren’t very friendly, and I said, ‘we’re going to change that,’" Carper said. "We transformed the Delaware Division of Revenue to customer friendly, focused on service, helping people meet their obligations, rather than just to punish them. And as a member of the Finance Committee in the Senate, I’ve taken the same approach.”
As the IRS expands Direct File, it will also work to strengthen all free filing options for taxpayers, including Free File, the Volunteer Income Tax Assistance program and the Tax Counseling for the Elderly program.
The IRS plans to announce additional details on the 2025 expansion in the coming months.
