However, opponents of the Internal Revenue Service's option that cuts out private tax software companies still aren't convinced of the program's value or security.
UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page.
Two more states will be a part of the Internal Revenue Service’s Direct File program next year.
When the 2025 filing season starts, more than 120,000 Maine and 600,000 Wisconsin taxpayers and will be eligible to file via the IRS created and managed free, online tax preparation and e-filing option.
The potential Pine Tree State and Badger State filers will join their counterparts in Connecticut, New Jersey, New Mexico, North Carolina, Oregon, and Pennsylvania as new participants.
The original Direct File pilot program was operated this year through Tax Day in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming.
Maine and Wisconsin participation brings to 20 the states where certain taxpayers will be able to use Direct File. The move also earns that total (so far) this weekend’s By the Numbers honor.
But the growing interest in Direct File has not quieted its critics. The latest objection to the program raises questions about the program’s ability to verify taxpayer identities.
A growing, but still limited option: The IRS rolled out Direct File 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.
It limited the types of returns the program will process, accepting only those from filers who got wage or salary income reported on Form W-2. That meant no self-employed Direct File taxpayers, including those with short-term gig jobs.
Direct File also was open only to those who claim the standard deduction. And only two tax credits — the Child Tax Credit and Earned Income Tax Credit — could be claimed by Direct Filers.
This year’s pilot also tested ways to ensure that residents of states where income tax is collected have ways to also electronically file those returns at no cost. In these states, Direct File directs those taxpayers to state-run programs for the filing of their state tax returns.
The goal was to test the system using relatively simple tax situations.
Similar limitations, as indicated by the specific number of expected new Direct File users in 2025, will apply next filing season.
However, the IRS says that its ultimate Direct File goal is to expand the IRS program’s reach and tax scope so that it can be an option for more taxpayers, primarily middle-income filers, nationwide.
IRS, 2024 Direct File users pleased: After the end of the main tax filing season in April, the IRS and Treasury Department assessed Direct File and reported that usage in the 12 pilot states exceeded expectations.
Yes, the 140,803 returns prepared and submitted by Direct File was tiny, just 0.09960386 percent of the more than 141 million 1040s filed by April 15. But tax officials pointed out that those users claimed more than $90 million in refunds, and saved an estimated $5.6 million in tax preparation fees on their federal returns alone.
More encouraging, Direct File taxpayers reported they were pleased with the program.
Maine, Wisconsin officials welcome Direct File: So are the leaders in Maine and Wisconsin, who welcomed their states’ coming Direct File participation.
“This new IRS Direct File tool will streamline the process of filing taxes and save Maine people valuable time and money,” said Maine’s Democratic Gov. Janet Mills. “I thank President Biden and Vice President Harris for the Inflation Reduction Act, which made this exciting new service possible.”
“When tax season rolls around, with it comes the stress of having to navigate the complicated, time-consuming, and expensive federal filing process,” said Independent U.S. Sen. Angus King. The federal law providing for Direct File was created, he added, “to save taxpayers their time and money, simplify filing, and help ease the chokehold third-party tax preparers or software companies have on Maine people.”
King also pointed to Maine’s successful free state tax filing program. After filing their federal returns using Direct File, the state’s taxpayers will be connected with Maine Tax Portal to file their state return for free.
Maine Revenue Services says it will work with the IRS to further integrate the state tax portal, so that by 2026 Maine taxpayers can transfer their Direct File federal return information over to the state site.
Similar support was offered by Wisconsin lawmakers.
Wisconsin U.S. Sen. Tammy Baldwin also cited the cost of private sector tax software programs. “I voted for the Inflation Reduction Act to put money back into the pockets of hardworking families, not pad the profits of these big third-party companies that charge exorbitant junk fees,” said the Democratic senator.
“This is going to save hardworking folks time and money, and we look forward to seeing how the Direct File and new WisTax programs will work together to better serve Wisconsinites when tax season comes around in 2025,” said Wisconsin’s Democratic Gov. Tony Evers.
Taxpayer identity protection questions: With 20 states in Direct File next year, the IRS program could start to cut into the private tax software market. If it’s allowed to do so by federal lawmakers.
Many Republican members of Congress oppose the program. They see it as government overreach into individual taxpayers lives. They also object to the cost.
And they contend that while the Inflation Reduction Act authorized the IRS to explore its own tax preparation and e-filing program, it did not expressly give the agency the authority to create it.
Some private sector tax organizations agree with Direct File’s Capitol Hill opponents.
The National Taxpayers Union Foundation, a fiscally conservation nonprofit, has called on the IRS to address “longstanding, persistent questions about its taxpayer identity verification procedures,” specifically in connection with Direct File.
NTUF pointed to earlier IRS problems with ID.me, whose proprietary platform to authenticate users’ identities before they can use Direct File.
The organization also noted a recent Treasury Inspector General for Tax Administration (TIGTA) report that found the IRS still has not adequately addressed security concerns with Login.gov that prevented it from being used for the Direct File pilot. Login.gov is a single-sign on service launched by the General Services Administration (GSA) in 2017, an which is used as an identity verification tool at a variety of federal agencies.
“IRS Commissioner [Danny] Werfel claims that Direct File merely provides taxpayers with additional filing options, yet the IRS is failing to provide taxpayers more meaningful options on how the tool captures their most sensitive information,” argues NTUF. “Such options are important because taxpayers, like customers, have different needs and preferences.”
You also might find these items of interest:
- IRS' free Direct File officially opens to all eligible taxpayers
- FFTC takes actions against Intuit/TurboTax & H&R Block tax software programs
- Free File’s 8 software companies are available for 2024 filings through the Oct. 15 extension deadline
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