The IRS has discontinued its free Direct File program, which allowed eligible taxpayers to file federal returns directly with the agency. Launched as a pilot in 2024, the service expanded in 2025 but faced opposition leading to its shutdown in late 2025. Taxpayers must now turn to alternative free filing options for the 2025 tax year.
The Direct File program debuted in 2024 as a pilot in 12 states, enabling individuals with straightforward tax situations—such as W-2 wages, Social Security benefits, retirement income, or unemployment compensation, along with the standard deduction—to submit federal returns at no cost. It supported English and Spanish users and grew to 25 states in 2025, though it did not handle state returns directly; in some areas, federal data could transfer to state tools. The IRS projected eligibility for about 30 million Americans, yet fewer than 300,000 participated, despite positive feedback from users.
In early November 2025, the IRS notified participating states that the program would not operate for the upcoming season, with no future launch date announced. By January 2026, the Direct File website became inaccessible. The decision stemmed from political pushback by Republican lawmakers and tax preparation industry groups, influencing the Trump administration to terminate it. A US Department of the Treasury report for Congress highlighted low usage, elevated costs, and overlap with existing free options like IRS Free File.
Treasury Secretary Scott Bessent, acting as IRS commissioner, remarked in November 2025, "we think the private sector can do a better job." The IRS Free File initiative, a partnership with companies such as TaxAct and TaxSlayer since 2003, remains available for those with adjusted gross income up to $84,000, covering even complex scenarios without charge through approved partners. All income levels can access free fillable forms, though these require manual calculations and exclude state filings.
Commercial alternatives include Cash App Taxes and FreeTaxUSA, both offering free federal filing regardless of complexity; state returns cost $15.99 with FreeTaxUSA. For in-person aid, the Volunteer Income Tax Assistance program serves those earning under $67,000, people with disabilities, or limited English speakers, while Tax Counseling for the Elderly targets those 60 and older, focusing on retirement issues. Prior Direct File users can obtain transcripts via IRS Form 4506 for a $30 fee, submitted by mail.
