Illinois Department of Revenue Expands Free Direct File

The Illinois Department of Revenue joined the IRS Direct File pilot for the 2025 tax season, allowing residents to prepare and file both federal and state tax returns for free. The move expanded digital filing access and aimed to reduce costs and errors while modernizing Illinois's electronic tax system for taxpayers statewide. IRS Direct File was subsequently discontinued in November 2025 and is no longer available for Filing Season 2026.

Illinois Department of Revenue Expands Digital Tax Filing

Overview of the Program

Illinois was one of 25 states participating in the expanded IRS Direct File pilot, more than doubling the number from the previous year's 12-state launch. The partnership gave taxpayers new options to file electronically without relying on commercial software, which can cost between $50 and $200 per return.

The collaboration was part of a larger federal effort to simplify the interaction between taxpayers and government agencies. For Illinois residents, it offered a streamlined digital experience for all tax reporting, reducing paperwork and processing delays. State officials emphasized that improving access to free online filing tools was a significant step toward equitable tax administration.

How the System Worked

Taxpayers completed their federal return directly through the IRS Direct File portal and were automatically redirected to the MyTax Illinois account system to file their state return. This integration helped eliminate duplicate data entry and ensured consistent reporting across both systems, improving accuracy for individual taxpayers and treasury agencies alike.

According to the Internal Revenue Service, the Direct File platform supported common income types, including wages, Social Security, and unemployment compensation. It also accommodated major credits, including the Earned Income Tax Credit, Child Tax Credit, and deductions for student loan interest or Health Savings Accounts.

The Illinois Department of Revenue confirmed that the 2025 tax filing season opened on January 27, 2025, with an April 15 deadline for both federal and state returns. Electronic access was available through October 15 for taxpayers using the Direct File feature.

Added Security and Accessibility

The platform featured security measures, including a locked padlock icon and personalized verification codes, to prevent the delivery of fraudulent messages. Each user session was encrypted and monitored for unusual activity to protect taxpayer data.

The department said that accessibility was a top priority. Direct File was available in both English and Spanish, and the MyTax Illinois portal supported digital assistance features, including chat help and guided walkthroughs for new users. These enhancements ensured that taxpayers could prepare and file with confidence, regardless of their level of experience with online systems.

Understanding Direct File and Illinois's Digital Services

Background on Digital Tax Filing

Electronic filing has become the standard nationwide, offering faster processing, quicker refunds, and fewer errors than paper returns. Illinois has encouraged residents to file electronically through the MyTax Illinois system for several years, offering options to pay balances, view prior filings, and download tax records.

The state's participation in the IRS Direct File pilot reflected a coordinated effort to simplify tax filing at both the federal and state levels. The Internal Revenue Service launched the pilot in 2023 to test a free, government-run filing option. Strong participation and high satisfaction among users who filed prompted its expansion in 2025, though overall uptake remained lower than projected. The IRS discontinued the program in November 2025, citing low participation rates and a preference for strengthening existing free filing programs, particularly IRS Free File, a long-standing public-private partnership with commercial tax software providers.

How Illinois Fits into the IRS Direct File Pilot

The Illinois Department of Revenue stated that the partnership helped align data sharing among agencies and improved efficiency in related areas, such as the property tax system, cigarette tax returns, and motor fuel tax law reporting. Officials noted that the updates supported ongoing reforms under recent public acts aimed at increasing transparency and reducing administrative burdens on certain taxing jurisdictions.

Illinois's inclusion also helped local governments track gross receipts and revenue committed under existing state programs. By integrating Direct File with MyTax Illinois, the state aimed to reduce eligible penalties, enhance compliance, and simplify the process for Illinois customers to report income and respond to final notices electronically.

What Illinois Taxpayers Should Do Now

IRS Direct File is no longer available. Taxpayers who used Direct File in prior seasons can access a summary of their returns through their IRS online account. Those who need a full copy of a previously filed return may submit a request to the IRS by mail.

For the current filing season, free filing options remain available through IRS Free File, which provides access to free federal tax preparation software for eligible taxpayers through a partnership between the IRS and commercial providers. Illinois residents can also continue to file their state returns electronically through the MyTax Illinois portal, which remains active and fully operational.

Taxpayers with questions about payment plans, registration updates, or supporting schedules can contact the Illinois Department of Revenue Taxpayer Assistance Hotline or respond electronically to any identity verification notices or final notices through MyTax Illinois.

Officials Highlighted Taxpayer Benefits

Federal and State Perspectives

The IRS promoted Direct File as a way for eligible taxpayers to file their federal returns at no cost and continue directly to their state system without paying third-party fees. The program received favorable usability reviews, with the majority of users rating their experience positively.

An Illinois Department of Revenue spokesperson said the collaboration with the IRS underscored the state's commitment to modernization and public trust. "Our focus is to provide updated information, accessible tools, and secure options for taxpayers to submit returns electronically through MyTax Illinois," the spokesperson said.

Industry and Community Reactions

Associations representing residential and commercial property owners said the combined filing system helped reduce outstanding eligible tax liabilities and interest forgiven for late payments. Labor unions and community organizations called the expansion a practical win for working families, particularly those who relied on free filing services.

Consumer advocates said that integrating state and federal systems lowered the risk of mismatched records and errors in income tax filings. The Illinois Department expanded outreach through local libraries, community colleges, and professional associations to help residents navigate the transition and take advantage of the free tools available.

Sources

The 2025 rollout of Direct File reflected Illinois's broader commitment to digital government and economic opportunity. Although the Direct File program has since been discontinued, MyTax Illinois remains available for state tax filing, and free federal filing options continue through IRS Free File.

Taxpayers can find more information through the following official sources:

• Illinois Department of Revenue
• MyTax Illinois
• IRS Free File (suggested addition: links to https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free)

By William Mc Lee, Editor-in-Chief & Tax Expert—Get Tax Relief Now