• The IRS free tax filing program, Direct File, will have 24 participating states for the 2025 filing season.
• More than 30 million Americans will be eligible and Direct File has expanded to include more types of income, credits and deductions.

Next year, more than 30 million Americans in 24 states will be eligible for Direct File, the IRS' free tax filing program, the agency and U.S. Department of the Treasury announced on Thursday.

The Direct File pilot was open to limited taxpayers in 12 states for the 2024 filing season, including Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.

For the 2025 season, the program will add 12 new states, including Alaska, Connecticut, Idaho, Kansas, Maine, Maryland, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania and Wisconsin, the agencies told reporters on a press call.

More states are expected to join in 2026.

More from Personal Finance:
Your money and the election: How to frame decision-making amid uncertainty
Why your Roth IRA conversions could have 'unintended' tax consequences
Student loan 'on ramp' relief ends, putting some borrowers at risk of delinquency

Who can use IRS Direct File

"This year, taxpayers in Direct File's 24 states will see far more tax situations covered than during last year's pilot," and the program will be available at the opening of tax season, IRS Commissioner Danny Werfel said Thursday on the press call. 

In 2024, the pilot program allowed simple filings — taxpayers with Form W-2 wages, Social Security retirement income, unemployment earnings and interest of $1,500 or less — but excluded contract income reported via Form 1099-NEC, gig economy workers and self-employed filers.

Next season, Direct File will also support interest income above $1,500, pension and annuity income (excluding individual retirement accounts) and Alaska Permanent Fund Dividends. 

During the pilot, Direct File supported the earned income tax credit, child tax credit and credit for other dependents.

For 2025, the program will add support for the child and dependent care credit, premium tax credit for Marketplace insurance, the credit for elderly or disabled and retirement saver's credit.

Filers still must claim the standard deduction rather than itemizing tax breaks to participate.

Direct File will continue to allow certain "above-the-line" deductions, including tax breaks for student loan interest and educator expenses. In 2025, the program will also add support for health savings account contributions.

"Our goal is to gradually expand the Direct File scope to support more common tax situations, focusing in particular, on tax situations that impact working families," Werfel said.

The IRS and Treasury in May unveiled a nationwide Direct File expansion and invited all 50 states to join the program.

During the pilot, more than 140,000 users filed returns and saved an estimated $5.6 million in tax preparation fees, the agencies said in April.