On October 3, 2024, the IRS announced updates to the IRS Direct File Program for the 2025 tax season (Tax Year 2024). The program, which launched last year, will expand to include additional states and income types.
Overview of the 2024 IRS Direct File Program
In its first year, taxpayers residing in 12 states were eligible to use the Direct File Program if their income was limited to W-2 wages, Social Security income, unemployment compensation, and/or interest income of less than $1,500. They were also able to claim credits such as:
- Earned Income Tax Credit
- Child Tax Credit
- Credit for Other Dependents
Deductions for student loan interest and educator expenses were also allowed, but taxpayers were only permitted to claim the standard deduction.
Additions for 2025 Filing Season
For the upcoming tax season, 12 more states will participate, bringing the total to 24. Additionally, the IRS is expanding the types of income, credits, and deductions allowed. New additions include:
- 1099-INT interest income exceeding $1,500
- Alaska Permanent Fund dividends (for Alaska residents)
- Child and Dependent Care Credit (Form 2441)
- Premium Tax Credit (Form 8962)
- Credit for the Elderly and Disabled (Schedule R)
- Retirement Savings Contribution Credit (Form 8880)
- Health Savings Account Deduction (Form 8889)
As with the previous year, taxpayers using Direct File must claim the standard deduction.
Participating States for 2025
Twelve new states are joining the IRS Direct File program for the 2025 tax season:
- Alaska, Connecticut, Idaho, Kansas, Maine, Maryland, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Wisconsin
These are in addition to the 12 states that participated last year:
- Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, Wyoming
Other Key Points
- Availability: Direct File will be available at the start of the filing season.
- Eligibility: Taxpayers not residing in one of the 24 participating states cannot use the Direct File program.
- State Income Tax Returns: While the program only covers federal individual income tax returns, participating states with state income tax will guide users on transferring their information to a state-supported tool for preparing and e-filing state tax returns.
- Filing Options: Direct File is not replacing existing filing methods. Taxpayers will still have the choice of using tax professionals, Free File, free tax preparation sites (e.g., VITA and TCE), commercial software, or paper returns.
For more information on the IRS Direct File Program and its expansion for the 2025 filing season, visit the following on the IRS website:
- Direct File Program Page
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