IRS Direct File Faces Uncertain Future
A major shake-up is on the horizon for millions of American taxpayers. The free IRS program known as Direct File, which was designed to help people file their taxes without needing to pay for third-party software or tax services, may not be around much longer.
The news broke earlier this week when IRS Commissioner Billy Long, recently appointed by President Donald Trump, announced at a tax summit that the program would be coming to an end. “You’ve heard of Direct File. That’s gone,” he said, confidently declaring that his leadership would bring about big changes at the tax agency.
Direct File, once seen as a beacon of hope for taxpayers frustrated with high preparation fees, could disappear just two years after its launch.
What is a direct file, and why does it matter?
Direct File was launched in 2024 as a free, web-based filing tool created by the IRS. It allowed eligible taxpayers to file simple returns directly with the government, without needing software from companies like TurboTax or H&R Block. For many people, especially those with low to moderate incomes, it meant saving an average of $160 in tax prep fees.
Originally tested in 12 states, the program expanded in 2025 to serve taxpayers in 25 states. Here’s the full list:
- 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
- Wisconsin
- Wyoming
These states were part of a pilot aimed at simplifying the filing process and helping taxpayers avoid the often expensive and confusing process of dealing with private companies.
The program was especially praised by consumer groups and supported by the Biden administration, which saw it as a step toward fairer, more transparent tax services.
Why is it going away?
The likely shutdown of Direct File comes after Congress passed the One Big Beautiful Bill Act, a new piece of legislation backed by the Trump administration. It calls for the end of the Direct File program and instead tasks the Treasury Department with forming a new tax filing task force.
This task force has 90 days to come up with a plan to replace Direct File with something else—likely a public-private partnership, which means the IRS would work with outside companies to provide “free” filing options, based on income.
Supporters of the bill argue that private companies already offer free tax filing programs and that it’s wasteful for the government to build its own system. Critics, however, say that those free programs are often confusing, limited, and full of upsells that lead many people to end up paying anyway.
What does this mean for 2026?
The 2025 tax season is expected to be the last for the Direct File program. According to current plans, the service will remain open through October 15, 2025, so those who haven’t filed for 2024 still have time.
However, the 2026 tax season—when people will be filing their 2025 tax returns—will likely look very different.
The IRS hasn’t officially said that Direct File is shut down, but based on the commissioner’s statement and the new law, it’s clear that the program won’t be continuing in its current form.
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What’s replacing it?
We don’t know yet.
The new law doesn’t create a replacement—it only sets the stage for one. The Treasury Department has been told to study options and report back. Some of the things they’re supposed to explore include:
- Whether it’s better to offer government-run tools or partner with private companies
- How to make filing easier and more consistent for everyone
- What people think about free filing options
- How much it would cost to create a new IRS-run system
- How to design a system that works for both simple and complex tax returns
So for now, nothing is ready, and it’s unclear what will take Direct File’s place.
Can you still file for free?
Yes—but your options may change.
Even if Direct File disappears, the Free File program is still available. This program is a long-standing partnership between the IRS and certain tax software companies. If your income is $84,000 or less, you can use Free File guided software to file your return.
For people who make more than that, or for those who prefer to do their taxes by hand, fillable forms are still offered for free on the IRS website. However, these forms don’t offer much help—there’s no guidance, no error-checking, and no assistance with deductions or credits.
Why this matters for millions of Americans
Tax season is already stressful for many people. Add in expensive software fees, confusing rules, and the pressure to file correctly—and it’s no wonder that people were excited about Direct File.
The program gave taxpayers an easy, trustworthy, and free way to file their returns. Its removal could push people back into the arms of for-profit companies, even when those companies don’t always offer clear or honest pricing.
For people living in one of the 25 participating states, this change could mean higher filing costs, fewer choices, and more confusion.
What should you do next?
If you utilised Direct File this year or intend to do so in the future, stay vigilant for updates from the IRS and the Treasury. Changes are likely to happen quickly between now and the end of 2025.
In the meantime:
- Finish your 2024 tax return using Direct File before October 15, 2025
- Check to see if you qualify for IRS Free File
- Be cautious when using private tax software—watch for hidden fees and charges
- Contact your lawmakers if you want to support the return of Direct File
