The North Carolina Department of Revenue will offer new electronic filing options for the 2025 tax season, including participation in the IRS Direct File program. For the first time, eligible residents can complete both their federal and state returns in one online system, giving qualified taxpayers a secure way to file taxes for free directly.
The North Carolina Direct File option allows residents to begin with the IRS platform, where they complete their federal tax return. After finishing the federal portion, the system links them to the state’s secure filing tool, FileYourStateTaxes, to complete the state return. This integrated approach helps reduce mistakes, shortens refund timelines, and provides taxpayers with a streamlined filing tool to handle both forms.
Not all taxpayers will qualify for this option. To be eligible, residents must have lived in North Carolina for the entire year, earned all income within the state, and taken the standard deduction rather than itemizing. Income sources supported by Direct File include W-2 wages, retirement distributions, Social Security, unemployment benefits, and interest earnings. The federal program also supports common tax credits such as the Earned Income Tax Credit, Child Tax Credit, Premium Tax Credit, and Child and Dependent Care Credit.
Taxpayers can use the IRS online tool to check their eligibility before starting. In addition, the system supports an amended return for some instances, giving taxpayers another way to correct previously filed forms without resorting to mail.
Other options remain available for those who do not meet the Direct File requirements. NC Free File continues to provide free filing services to taxpayers who meet specific income limits through partnerships with various software providers. Commercial products remain an option for individuals with more complex situations or who want added features. These programs may involve a fee but are designed to handle cases not supported by Direct File.
The filing deadline for the 2024 tax return remains April 15, 2025. Taxpayers who owe a balance can request an extension, apply for payment arrangements, or submit their return by mail if they choose not to file electronically.
North Carolina announced in August 2024 that it would join the IRS Direct File program beginning with 2024 returns filed in 2025. The decision places the state among a select group participating in the federal initiative, which started as a limited pilot the previous year. Officials said the move is part of a broader effort to modernize tax administration and reduce costs for families who often spend hundreds of dollars on private preparation services.
The expansion comes as many states explore new digital tools for managing income tax filings. Direct File allows residents to complete their federal and state tax returns through a single online process, giving qualified taxpayers an alternative to traditional services. State officials estimate more than 1.25 million North Carolinians may qualify for the program this year, a significant step toward providing taxes for free to households across the state.
By offering a secure system that allows residents to apply, review, and confirm their filings online, the Department of Revenue is signaling a commitment to increasing accessibility and simplifying the filing process for years to come.
“Making Direct File available to North Carolinians is a huge win for working families,” said Ronald Penny, Secretary of the North Carolina Department of Revenue, in the agency’s August announcement. He emphasized that the program will allow many households to file taxes for free directly, helping reduce the financial strain of annual tax preparation.
The IRS has also promoted the system as a secure tool allowing taxpayers to complete their federal and state returns in one session. According to agency officials, the filing tool guides users step-by-step to minimize mistakes and ensure the application of eligible credits.
Advocacy groups that track access to financial services praised the move, highlighting the savings for qualified taxpayers who might otherwise owe hundreds of dollars to commercial preparers. Some professional tax firms, however, have pointed out that other filing methods remain essential. They argue that complex income tax cases may require additional products or services beyond what Direct File currently offers.
The deadline for filing a 2024 tax return remains April 15, 2025. Eligible residents can check their status using the IRS Direct File eligibility tool before starting the process. Those who qualify may complete both the federal tax return and state return online, while others can still use NC Free File, commercial software, or submit forms by mail.
Taxpayers who owe a balance can request an extension, apply for payment arrangements, or file an amended return if corrections are needed. The Department of Revenue also provides instructions in English and Spanish to make the system more accessible. North Carolina is positioning Direct File as a long-term option to simplify income tax preparation by expanding options and offering a secure, guided filing tool.
Taxpayers can explore program details and instructions through the following official resources:
These resources provide details on eligibility, instructions in both English and Spanish, and guidance on filing an amended return, applying for payment plans, or requesting an extension if a taxpayer owes a balance.
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