The IRS is expanding its free tax filing service. Do you qualify?

The IRS is expanding eligibility for the government’s free tax filing software, Direct File, by doubling the number of participating states, including Pennsylvania and New Jersey, it announced Thursday.

The IRS launched Direct File, which allows users to submit simple tax returns directly to the government, as a pilot this past spring for a limited number of taxpayers. Although the software limited the types of income, credits, and deductions that filers could claim, more than 140,000 taxpayers in 12 states used the service.

With the expansion, about 30 million people in 24 states can take advantage of the program for the 2025 tax season, IRS commissioner Danny Werfel said, noting that the program will also be more comprehensive.

Participating taxpayers “will see far more tax situations covered than last [tax] year’s pilot,” Werfel said. “Direct File will cover more types of income, more credits and more deductions so millions more taxpayers can take advantage of this free filing option if it’s right for them.”

The initial version of Direct File allowed users to report only four types of income: wages, interest, Social Security benefits, and unemployment payments. Now, pension and annuity income, as well as the Alaska permanent fund dividends, will also be allowed.

The IRS will also add new tax credits to Direct File, including the child and dependent care credit, the saver’s credit, the premium tax credit, and the elderly and disabled credit. They will join the earned-income tax credit, child tax credit, and credit for other dependents as items taxpayers can report on their Direct File returns.

In addition, Direct File will add health savings account deduction coverage to its existing educator and student loan deductions. But it will still exclude the option to itemize deductions, which about 10% of Americans do, according to the Tax Policy Center, a D.C.-based think tank.

“If you’re earning a W-2 income, and you have relatively simple taxes and you live in one of these 24 states, you are likely eligible to use Direct File,” Deputy Treasury Secretary Wally Adeyemo said. “It can save you both time and money.”

In addition to Pennsylvania and New Jersey, the new participating states are Alaska, Connecticut, Idaho, Kansas, Maine, Maryland, New Mexico, North Carolina, Oregon, and Wisconsin. Some of those states had already said they intended to join after the Biden administration announced in May that it would make Direct File permanent and invited every state to participate.

Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming already participated. Several more states plan to join the program in 2026, Werfel said.

The IRS aims to have Direct File available by the start of the 2025 tax season and will roll out an updated eligibility checker this year, Werfel said. That would mark an earlier start than that of the pilot program, which wasn’t fully underway until the 2024 tax year had started — a delay that the IRS said contributed to lower turnout.

Looking ahead, the IRS wants to further expand the Direct File program to support “more common tax situations,” with a particular emphasis on working families, Werfel said.

Democrats have lauded the program as an easy-to-use, government-run tax filing site, which many other countries have long provided. But Republicans have criticized it as a costly and unnecessary government alternative to tools that major companies such as Intuit and H&R Block already provide.