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Update:
- The Internal Revenue Service (IRS) is launching a free tax filing pilot program that will be available for eligible taxpayers in 13 states during the 2024 tax season.
- The new service will give taxpayers the option to electronically file their federal tax return directly with the IRS at no cost.
- Eligibility to participate in the pilot program is limited to the state where the taxpayer lives and to taxpayers with certain types of income, credits and deductions.
- Taxpayers in New York, Arizona, California, Massachusetts, Alaska, Florida, New Hampshire, Tennessee, Texas, South Dakota, Nevada, Washington and Wyoming may be eligible.
- The 2022 Inflation Reduction Act directed the IRS to study the possibility of a free, direct e-file program.
IRS tax-filing system overview:
- Who: The IRS says it will launch a free tax-filing option in 2024.
- Why: Treasury Secretary Janet Yellen ordered the agency to launch the pilot program after an exploratory report found a significant number of taxpayers were interested in using a government e-filing system to file their taxes.
- Where: The e-filing program will be available to American taxpayers.
(May 25, 2023)
The Internal Revenue Service has announced it plans to launch a free tax-filing option in 2024 that could create an tax-filing system that is competitive with private tax preparers, Reuters reports.
According to an exploratory report the IRS submitted to Congress, 72% of Americans surveyed said they are “very interested” or “somewhat interested” in using a government system that would allow them to electronically file their tax returns.
The study was mandated under the Inflation Reduction Act, which was supported by Democratic lawmakers and provided $80 billion over 10 years for the IRS to modernize its technology, improve customer service, enhance its enforcement and rebuild the agency’s workforce.
After reviewing the report, Treasury Secretary Janet Yellen reportedly directed the IRS to launch the free tax-filing pilot program.
Free IRS tax-filing could save taxpayers billions of dollars each year, Treasury officer says
The IRS says, depending on the number of taxpayers who use the system and the complexity of the returns accepted, the cost of the new tax-filing system could cost somewhere between $64.3 million and $248.9 million each year.
Republicans have criticized the proposed free system because there are already free options to file simple tax returns through H&R Block and TurboTax. They are attempting to rescind the $80 billion promised to the IRS in their debt ceiling negotiations.
Laurel Blatchford, the Treasury’s chief implementation officer for the Inflation Reduction Act, says the free filing option may cost the IRS less than $10 per tax return, which is less than the approximately $40 that taxpayers pay for simple tax returns prepared by private companies.
Blatchford says the free IRS filing system could “potentially save taxpayers billions of dollars annually,” according to Reuters.
IRS commissioner says all tax-filing options will continue after pilot program launch
IRS Commissioner Danny Werfel says all filing options will continue after the launch of the pilot electronic filing program.
Werfel also notes Congress and the Treasury would need to determine funding for a full-scale direct tax-filing system. It is possible the funding could come from part of the $80 billion designated to modernize the IRS systems, he says.
Would you use a free tax-filing system provided by the IRS? Tell us your thoughts in the comments!
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9 thoughts onIRS to launch free tax filing pilot program in 13 states
I would absolutely use this—I pay hundreds of dollars to file every year which causes us to file later because of losing money.
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I would definitely use an IRS free site for filing. It was a nightmare for me to file online this year. I ended up having to file on paper to avoid paying $40 , and that didn’t include state tax. If you have straightforward W2 forms, not 1099s and a mix of forms, you can probably file for free using one of the existing companies, however if you have anything that needs documentation or is slightly complicated, you’ll have to pay. It’s not that simple for everyone. And forms weren’t even available in my area this year! You had to go to the library and have them copy any extra forms you needed. A major hassle. It used to be easy to file, not so much anymore.
Erik – Credit Karma hasn’t been free for over 2 years. They were bought out by Intuit, who also owns TurboTax.
Yep, absolutely.
We would use it…. Every year we file with either turbo tax or h&r block…. we always have to pay more then $200 for filing services and you know dang well it doesnt cost them that as well as Im the one doing all the work… they dont lift a finger to file my taxes…
I’ve used Credit Karma for years, for totally free tax filing, after being and being fooled by Turbo Tax’s allegedly “free” filing, which then came with a charge of $39.95 to complete the “free” return and submit it to the IRS. I am not in the habit of agreeing with the Republicans’ whining about the government “over-spending,” particularly when the stories emerged about how many of them had taken advantage of the COVID PPP relief programs (despite being multi-millionaires themselves by honest or other means), but I find the Republican arguments here essier to believe than the government’s statements about how much “the taxpayers” will save annually by spending millions every year to have the IRS process the returns for free. After working for the federal government for several decades before my retirement, and seeing up close the lying, cheating and the rot that is the federal government, that experience might cause my disbelief in anything a government spokesperson has to say. All you need to do is to watch a Presidential Press Secretary use a lot of words to say very little to see exactly what I mean.
Yes, I most certainly would use a tax system that direct files to the IRS (for free) and even for a reduced amount!