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The IRS has unveiled final testing for Direct File, the agency’s free tax filing program, with plans to fully open in 12 pilot states on March 12.
Starting on March 4, Direct File will expand final testing for eligible new users to begin federal returns, with availability 24 hours per day, 7 days per week, an IRS official said Friday.
Space will remain limited during final testing and Direct File may close briefly if users exceed the day’s allotment. However, if you already started a return, you can use the software without interruption, the IRS said. You can learn more and check eligibility at directfile.irs.gov.
After testing concludes, the IRS plans to fully open Direct File on March 12 to all eligible users in 12 pilot states, an IRS official said.
The pilot states include Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming. (Alaska was originally included, but is no longer part of the pilot.)
“We will be working closely with the 12 pilot states in this test run, which will help us gather information about the future direction of the Direct File program,” IRS Commissioner Danny Werfel said in January.
While the Direct File pilot doesn’t support state returns, the software will guide users from Arizona, California, Massachusetts and New York to a state-supported tax-prep tool.
Who qualifies for IRS Direct File
You may qualify for Direct File with a simple, straightforward return, with limited types of income, credits and deductions, according to IRS officials.
The pilot will only accept Form W-2 wages, Social Security retirement income, unemployment earnings and interest of $1,500 or less. This excludes filers with contract income reported via Form 1099-NEC, gig economy workers or self-employed filers.
As for tax breaks, you must claim the standard deduction. Direct File only accepts a few credits — the earned income tax credit, child tax credit and credit for other dependents. The software also accepts deductions for student loan interest and educator expenses.
