If you live in one of 25 states and earn a paycheck reported on a W-2, you can now file your federal tax return directly with the IRS, online, for free. No TurboTax. No H&R Block. No credit card required at the last step. The agency’s Direct File tool, which debuted as a 12-state pilot during the 2024 filing season, has more than doubled its reach for the 2025 tax year, covering 25 states and tens of millions of potentially eligible taxpayers.
That expansion puts the federal government squarely in competition with a tax-prep industry that has spent decades lobbying to keep it on the sidelines.
Which states are in, and which are not
The 25 states participating in Direct File for the 2025 filing season span every region of the country:
No state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington
State income tax with a Direct File-to-state handoff: Arizona, California, Connecticut, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Montana, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Wisconsin
In states with an income tax, filers who complete their federal return through Direct File can connect to a participating state tax portal to finish their state return. The experience varies by state, and not every state portal offers the same level of integration.
The U.S. Department of the Treasury invited all 50 states and the District of Columbia to join when it declared Direct File a permanent option in 2024. Twenty-five accepted. The rest may join in future years, but no timeline has been announced.
What the tool actually does
Direct File is a web-based, guided interview that walks filers through their federal return one question at a time. It is not a blank form. The IRS built it with identity verification, encryption, and a staffed support layer that includes live chat, according to a Government Accountability Office evaluation (GAO-25-106933) that reviewed the pilot’s operations and security controls.
During the 2024 pilot, the tool handled only the simplest returns: W-2 wage income, the standard deduction, and a handful of credits. For the 2025 season, the IRS broadened eligibility to cover additional income types and credits, including some retirement income and education-related tax benefits. The system still does not support every situation. Filers with self-employment income, itemized deductions, or complex investment gains need to look elsewhere.
The tool is aimed primarily at low- and moderate-income taxpayers with straightforward returns. If your situation falls outside what Direct File supports, it tells you upfront and points you toward other free options rather than trying to sell you anything.
How Direct File compares to other free filing options
Direct File is not the only way to file for free, but it is the only option built and run entirely by the federal government. Here is how the alternatives stack up:
- IRS Free File: A public-private partnership in which commercial software companies offer free guided preparation to filers with adjusted gross income of $84,000 or less (2025 threshold). The software is made by private companies; the IRS does not control the interface or the user experience.
- Free File Fillable Forms: Electronic versions of paper tax forms on the IRS website. No guided interview, no error-checking beyond basic math. Open to any income level, but practical only for people comfortable preparing returns by hand.
- VITA and TCE: The Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs provide free, in-person help at community sites. Availability depends on location, volunteer staffing, and operating hours.
- Commercial “free” tiers: Companies like TurboTax and H&R Block advertise free filing for simple returns, but upsells and state-return fees routinely push filers into paid products. In 2024, the Federal Trade Commission finalized an order barring Intuit from advertising TurboTax as “free” unless the offer genuinely applies to the person seeing the ad.
The key difference with Direct File: there is no paid tier. The tool has no financial incentive to steer you toward a premium product, because no premium product exists.
What remains unclear
The IRS published topline results from the 2024 pilot, reporting that more than 140,000 taxpayers used Direct File to submit returns during its first season. But as of June 2026, the agency has not released granular performance data: completion rates, average filing time, error rates, or detailed user satisfaction breakdowns. The GAO report references an internal IRS post-season review, but those metrics have not been made public.
State-by-state adoption figures for the 2025 season are similarly unavailable. How many eligible filers in each state actually used the tool, and how smoothly the federal-to-state handoff worked, are open questions the IRS is expected to address after the filing season closes.
There is also the awareness problem. The IRS promoted Direct File through its website and social media, but outreach varied by state. Many eligible filers likely defaulted to paid software simply because they did not know a government-built alternative existed.
And then there is the political dimension. The tax-preparation industry, led by Intuit and H&R Block, has long argued that a government-run filing tool creates a conflict of interest for an agency that also audits returns. Whether that opposition translates into legislative efforts to defund or limit Direct File will depend on upcoming budget fights and the broader political appetite for IRS modernization.
How to check your eligibility and file through Direct File
Taxpayers in the 25 participating states who have not yet filed their 2025 federal return can check eligibility and begin the process at directfile.irs.gov. You will need an IRS account with identity verification (ID.me or the IRS’s own identity process). The tool screens your situation at the start, so you will know quickly whether your return qualifies.
For the millions of Americans whose returns are straightforward enough to qualify, the pitch is simple: file directly with the agency that processes your return, skip the middleman, and pay nothing. Whether Direct File can sustain that promise depends on continued funding, broader state participation, and whether enough filers discover it exists. For now, in 25 states, it works.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
