Pennsylvania Becomes Next New State to Offer Free IRS Tax Filing Option in 2025 Under President Biden’s Inflation Reduction Act
WASHINGTON –Today, the U.S. Department of the Treasury and Internal Revenue Service (IRS) announced that Pennsylvania is the next new state to join IRS Direct File for Filing Season 2025. IRS Direct File was made possible by President Biden’s Inflation Reduction Act, which provided resources for the IRS to improve customer service in-person, over the phone, and online to ensure taxpayers claim the benefits and deductions for which they are eligible.
Following a successful pilot program in 12 states that saw 140,000 taxpayers claim more than $90 million in refunds and save an estimated $5.6 million in filing fees using the free online filing tool, Treasury and the IRS announced Direct File would be made permanent and opened to all states. Pennsylvania becomes the next new state to offer Direct File to its residents following Oregon and New Jersey. At least 1.5 million Pennsylvanians will be eligible to use the free online filing tool next Filing Season.
“Thanks to President Biden’s Inflation Reduction Act, more than 1.5 million Pennsylvanians will be able to file their taxes online for free, directly with the IRS in Filing Season 2025. Direct File will save Pennsylvania taxpayers time and money and help ensure they receive the tax benefits for which they are eligible,” said U.S. Secretary of the Treasury Janet L. Yellen. “Direct File is one of the many ways the Biden-Harris Administration is working to lower costs in everyday life, and we are pleased to welcome Pennsylvania as the next state to offer this new free option to taxpayers.”
“Filing your taxes should be free and easy – that’s why we’re improving our digital services and adopting IRS Direct File here in Pennsylvania,” said Governor Josh Shapiro. “Thanks to the Biden-Harris Administration’s Direct File initiative, Pennsylvanians will be able to save money by filing both their state and federal taxes at no cost on an easy-to-use platform. There should be no wrong door to access government services, and the Shapiro Administration will continue to bring human-centered, user-friendly, reliable, and accessible digital services to every Pennsylvanian to help lower costs and break down barriers.”
“The numbers don’t lie: Direct File is a game-changing, commonsense program that enables Americans to do their taxes easily, securely, and affordably. Thanks to this program, Americans can confidently file their taxes and keep more of their hard-earned dollars,” said Senator Bob Casey. “I fought to expand Direct File to our state to put more dollars back in Pennsylvanians’ pockets and to lower costs for Pennsylvania families.”
“For many years I fought for the IRS to make it easier for Americans to file their taxes”, said Representative Brendan Boyle. “So I’m proud to say IRS Direct File will save people time and money. It is just one example of how the IRS is utilizing the funding Congress provided to improve the service it provides to taxpayers.”
“With the Inflation Reduction Act, we kept our promise to taxpayers by delivering better customer service and a fairer tax system for all Americans,” said Representative Mary Gay Scanlon. “Rolling out the free Direct File program will make it easier for Pennsylvania families to file their tax returns and get the tax returns and credits they deserve, without having to pay costly third-party tax prep services. I’m proud to celebrate this major win for Pennsylvania taxpayers with Secretary Yellen and Governor Shapiro today.”
The Treasury Department’s goal in the coming years is to expand the reach and tax scope of Direct File to provide an option for working-and middle-class taxpayers nationwide. Direct File is central to the Biden-Harris Administration’s efforts to deliver modern, world-class customer service using Inflation Reduction Act resources. Direct File also advances a goal of the IRS’s Strategic Operation Plan (SOP) to ensure that taxpayers receive tax credits that they are eligible for, including the Child Tax Credit and Earned Income Tax Credit. The IRS will continue to improve the product over time and ensure that it remains free, secure, and easy to use.
BACKGROUND ON THE DIRECT FILE PILOT PROGRAM
The average American spends $270 and 13 hours filing their taxes. (Taxpayer Burden Survey) President Biden’s Inflation Reduction Act required the IRS to study the potential for an IRS-run Direct e-File System that would allow taxpayers to file taxes for free, directly with the IRS. After reviewing the report, which showed strong taxpayer interest in a free IRS filing option, the Treasury Department initiated a pilot of IRS Direct File during the 2024 Filing Season.
In Filing Season 2024, Direct File was available to taxpayers with simple tax situations in 12 states. The Pilot exceeded expectations with more than 140,000 Americans successfully filing in the five weeks the program was widely available following extensive product testing. These filers claimed more than $90 million in refunds and saved an estimated $5.6 million in tax preparation fees on their federal returns alone.
Direct File users also reported a high degree of satisfaction and quick answers to their filing questions. In a GSA Touchpoints survey of more than 11,000 Direct File users, 90 percent of respondents ranked their experience with Direct File as “Excellent” or “Above Average.” A majority of survey respondents who filed taxes in the prior year reported having to pay to prepare their taxes last year. Among survey respondents, 47 percent of users paid to file their taxes last year and 16 percent did not file last year at all.
In Treasury and IRS engagements with Direct File users, taxpayers relayed that Direct File was straightforward to use, and they valued features that allowed them to learn more about different tax situations, credits, and deductions. Taxpayers emphasized their appreciation for the fact that Direct File is always free and there are no hidden fees or attempts to upsell users as they moved through the filing process. Taxpayers also shared that filing directly with the IRS gave them confidence and that they were able to quickly fix mistakes and get their taxes filed accurately.
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