Eligibility criteria for IRS free Direct File program: 30 million people could qualify.

• Taxpayers in 25 states can access the IRS free Direct File program starting on Jan. 27.
• In 2025, more than 30 million taxpayers will be eligible to use Direct File due to expanded tax situations, according to the U.S. Department of the Treasury.
• Many taxpayers can also use IRS Free File, among other options.

In 2025, the tax season begins on January 27, and more taxpayers will be able to use the IRS's free tax filing program, Direct File, which was introduced in 2024.

From January 27th, eligible taxpayers in 25 states, including 12 from the 2024 pilot and 13 new states, will have access to Direct File, the agency announced on Friday.

In 2025, over 30 million taxpayers in 25 states will be eligible for Direct File.

IRS Commissioner Danny Werfel announced that new Direct File features will simplify tax returns this season, making the process quicker for taxpayers.

The IRS has announced the beginning of the 2025 tax season. Biden's total student debt relief has surpassed $183 billion. The amount of money you can save by abstaining from alcohol during "Dry January" is being calculated.

According to the IRS, the states participating in the program for 2025 are Alaska, Arizona, California, Connecticut, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington state, Wisconsin, and Wyoming.

After submitting federal returns through Direct File, the program directs users to their state's software for state tax filings. In some cases, Direct File can automatically transfer filing information.

If you didn't reside in a participating state for the entirety of 2024, you won't be eligible for Direct File, as stated on the website. You can verify your eligibility here.

Direct File to 'cover more tax situations'

In 2024, the Direct File pilot included simple filings such as 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.

The pilot restricted tax breaks to the standard deduction and accepted only a few credits. Filers could claim the earned income tax credit, child tax credit, and credit for other dependents. Additionally, the software offered tax breaks for student loan interest and educator expenses.

Werfel stated on Friday that Direct File has broadened its coverage of tax situations compared to the previous year.

In October, Direct File announced that it would provide support for interest income over $1,500, pension and annuity income (excluding individual retirement accounts), and Alaska Permanent Fund Dividends in 2025.

Filers can claim additional tax breaks, such as the child and dependent care credit, premium tax credit for Marketplace insurance, credit for elderly or disabled and retirement saver's credit, while still claiming the standard deduction. Additionally, Direct File will add the tax break for health savings accounts.

This season, filers can automatically import personal data, an identity protection pin, and some details from Form W-2 from their IRS account.

Other options to file your taxes for free

Eligible taxpayers can start e-filing returns prepared by IRS Free File on Jan. 27, in addition to Direct File.

If your 2023 adjusted gross income was $79,000 or less, you are eligible for IRS Free File.

According to Tim Hugo, executive director of the Free File Alliance, many taxpayers mistakenly believe that Free File is only suitable for basic tax returns, but this is not the case.

Programs such as Volunteer Income Tax Assistance, Tax Counseling for the Elderly, and MilTax offer free tax preparation for eligible filers.