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Connecticut & North Carolina to join IRS Direct File in 2025

August 18, 2024

UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page.

IRS Direct File banner image_A Closer Look-1

State participation in the Internal Revenue Service’s Direct File slowly keeps growing.

Connecticut and North Carolina are the latest states that will allow some of their taxpayers to use the IRS’ direct tax preparation and e-filing online program next year.

They join New Mexico, New Jersey, Oregon, and Pennsylvania as new participants during the 2025 tax filing season.

Twelve states — Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming. — were part of the Direct File pilot program this year. The IRS rolled it out slowly during the 2024 tax filing season to test the free online program that it developed and operates, cutting out private sector tax prep software companies.

Pleased with the initial success, Treasury and the IRS eventually announced Direct File would be a permanent filing season fixture and invited all states to join.

With the Constitution and Tar Heel states becoming the latest to accept that invitation, there will be 18 Direct File states in 2025. That earns 18 this weekend’s By the Numbers honor.

State agreement just the first step: While many taxpayers might find Direct File an interesting option so that they can avoid commercial tax software costs, the program still is not available to all taxpayers.

As rolled out, it was limited not only geographically, but also based on the types of returns filed. Basically, it was, and likely will continue to be for the foreseeable future, a program for uncomplicated tax filings.

For example, Direct File was available only to taxpayers with wage/salary income for which a Form W-2 was issued. No self-employed filers, including those with short-term gig jobs, could use it.

It also was open only to those who claim the standard deduction. And several tax credit claims were not an option for Direct File users.

The Treasury Department notes, however, that its goal in the coming years is to expand Direct File’s reach and tax scope so that it can be an option for more taxpayers, primarily middle-income filers, nationwide.

Direct File small, but successful: The current Direct File restrictions notwithstanding, enough eligible filers found the program useful.

Through the April 15 Tax Day deadline, IRS reported that it received 140,803 Form 1040s that were directly filed using the pilot program software.

Yes, that is a minuscule part — just 0.09960386 percent — of the more than 141 million 1040s filed by mid-April. But the tax officials noted that those users, who claimed more than $90 million in refunds and saved an estimated $5.6 million in tax preparation fees on their federal returns alone, said they were happy with Direct File.

And it was more than the IRS projected when it kicked off the agency-run free tax prep and e-filing program.

More states mean more filings: With six new states, so far, participating in Direct File next year, the filing numbers will grow.

At least 290,000 Connecticut taxpayers will be eligible to use the free tax filing option made possible by President Biden’s Inflation Reduction Act

“The Direct File tool will make it easier and more convenient for the average person to file their taxes, and it will help them save both time and money by avoiding the need to purchase for-profit tax filing software,” said Connecticut Gov. Ned Lamont.

Similar supportive sentiments were offered by North Carolina Gov. Roy Cooper. Approximately 1.25 million taxpayers in his state will be eligible to use Direct File for the upcoming tax season.

“Filing taxes is often stressful, expensive, and time-consuming for North Carolina taxpayers and families,” said Cooper. “The IRS Direct File tool helps remove unnecessary hurdles and fees by allowing taxpayers to file directly with the IRS for free, keeping more money in their pockets.”

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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