IRS: Free online filing program will be available in 2024 for eligible taxpayers in 13 states

Select taxpayers in 13 states will have the option to participate next year in the IRS’s electronic Direct File pilot program, the agency announced Wednesday, marking the latest step in its efforts to simplify filing season.

As part of the “limited-scope pilot,” taxpayers in Arizona, California, Massachusetts and New York will be presented with the option to electronically file their federal returns in 2024 directly with the agency at no cost. 

Additionally, taxpayers in nine states with no income tax — Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming — may also be eligible to take part in the program.

IRS Commissioner Danny Werfel said in a statement that the agency will work closely with officials in the four participating states, whose revenue departments signed separate Memorandums of Understanding with the IRS last month. Information-gathering from the pilot will inform the “future direction” of Direct File, Werfel added.   

While all states were invited to join the pilot, “not all states were in a position” to do so in 2024, the agency noted. Taxpayers with “relatively simple returns” in the 13 states will be eligible to participate. Those who receive the Earned Income Tax Credit and the Child Tax Credit can also partake in the Direct File pilot. 

The IRS was tasked with studying the feasibility of a free, direct filing tax program as part of the agency’s nearly $80 billion funding infusion via the Inflation Reduction Act. The Direct File pilot program comes after the IRS delivered a report to Congress in May that detailed costs, benefits and operational challenges, all of which will be evaluated in the pilot program.

“We have more work in front of us on this project,” Werfel said. “The Direct File pilot is undergoing continuous testing with taxpayers to identify and resolve issues to ensure it’s user-friendly and easy to understand. We continue to finalize the pilot details and anticipate more changes before we launch for the 2024 tax season.”