IRS Direct File Usage Grows in 2025 Filing Season

Editor's Note:IRS Direct File was discontinued for Filing Season 2026. On November 5, 2025, the IRS notified all 25 participating states that "IRS Direct File will not be available in Filing Season 2026," and that no launch date had been set for the future. The program's webpage now states: "Direct File is closed." The article below covers the 2025 filing season, during which Direct File was active, and has been updated to reflect its current status.

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Early data released by the Internal Revenue Service showed gradual adoption of IRS Direct File during the 2025 tax filing season. The government's free online filing system successfully submitted hundreds of thousands of federal returns for Tax Year 2024, according to Treasury reports. However, the share of total filers remained small compared with other electronic filing options, and the IRS subsequently discontinued the program before the 2026 filing season began.

Treasury Report Showed Early Adoption of Direct File

As of April 20, 2025, the U.S. Department of the Treasury reported the filing and acceptance of 296,531 federal returns through IRS Direct File. These filings represented roughly 0.2 percent of all federal income tax returns for Tax Year 2024.

The report from the United States government provided an early look at how taxpayers across the United States chose to file their taxes on the Internal Revenue Service's platform rather than commercial tax preparation software. Officials said the data helped evaluate how taxpayers moved between options such as IRS Free File, guided tax software, and commercial tax software platforms.

Pilot Program Provided Context for 2025 Filing Season

The Internal Revenue Service reported that it accepted 140,803 federal returns through IRS Direct File during the 2024 pilot program. The higher total recorded during the 2025 tax filing season reflected expanded eligibility and growing awareness of the system.

Many taxpayers still relied on tax preparation software offered by companies such as H&R Block. Through IRS Free File, taxpayers could file with guided tax software offered by a trusted partner company or use Free File Fillable Forms to complete a federal return online.

Eligibility Checks Revealed Strong Interest in the Filing Tool

Treasury data showed significant interest in the platform even among taxpayers who did not complete the filing process.

About 1.25 million tax units used the eligibility checker to determine whether they could file through IRS Direct File. Still, fewer than 300,000 submitted a federal return through the system by the April reporting date.

Filers Often Chose Software That Handled State Returns

The Internal Revenue Service said the difference between eligibility checks and completed filings helped identify where taxpayers dropped out of the process.

Some taxpayers discovered that their situation included income, credits, or deductions that the platform did not yet support. Others preferred tax software that prepared both federal and state returns, since many filers had to meet state tax filing requirements in addition to federal income tax obligations.

Non-Free-File commercial platforms sometimes offered services such as refund anticipation loans, bank products, or audit protection, which could influence how people decided to file their taxes. By contrast, IRS Free File partners are prohibited from offering or upselling such products to taxpayers who use the Free File program.

Free Government Filing Option Targeted Simple Returns

IRS Direct File allowed eligible taxpayers to file their federal returns electronically with the Internal Revenue Service. The system functioned as guided tax software, asking users questions about income, credits, deductions, and account information before transmitting federal tax information.

The system supported taxpayers with relatively simple filing situations. Many users were taxpayers who received W-2 wage income and claimed the standard deduction.

These taxpayers could qualify for tax credits such as the Earned Income Tax Credit or the Child Tax Credit, and some could also claim the premium tax credit tied to health insurance coverage.

Access Had Expanded to 25 Participating States

For the 2025 tax filing season, IRS Direct File was available to eligible taxpayers in 25 states — up from 12 states during the 2024 pilot. To qualify, taxpayers generally had to have lived in a participating state for the entire year and could not file multiple state returns or report complex income types.

Taxpayers preparing to file their taxes should gather documents that affect federal tax refunds, including W-2 forms and other records. Some filers may also need form instructions, such as Form 4868, to request an extension.

With Direct File no longer available for Filing Season 2026, taxpayers with simple returns can still file at no cost through IRS Free File, which offers guided tax software through trusted partner companies as well as Free File Fillable Forms for taxpayers at any income level.

Sources

• U.S. Department of the Treasury – Direct File usage data report
• Internal Revenue Service – Direct File eligibility overview
• Internal Revenue Service – Direct File pilot evaluation report
• Internal Revenue Service – Free File overview
• Federal News Network – IRS Direct File discontinuation announcement, November 2025

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