The IRS Direct File pilot is now available in Florida, offering residents the opportunity to file their federal tax return for free, bypassing the need for commercial software.
"We're testing it. We're starting very small. That's why we only have twelve states participating right now. We want to know how it goes, if it works for taxpayers and we'll analyze it and take it from there," said Alejandra Castro from the IRS.
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WATCH HEREThe Direct File is for individuals with simple tax scenarios. However, it's not available for taxpayers working in the gig economy who have 1099 forms.
To qualify, you must have earned income in 2023 from a job (Form W-2), unemployment (Form 1099-G), Social Security benefits (Form SSA-1099), or up to $1,500 in interest income (Form 1099-INT), and you plan to take the standard deductions.
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The program specifically caters to people with certain or no health insurance, excluding those who purchased insurance through a marketplace like Healthcare.gov. Eligible credits under this service include the Child Tax Credit, Earned Income Tax Credit, and credit for other dependents.
High-income taxpayers may find they do not qualify for the Direct File pilot due to its limitations in handling complex tax situations. Eligibility can be checked at directfile.irs.gov.
Castro also pointed out a convenient feature of Direct File, saying, "The good thing about direct file is that you can actually start your tax return, and if you don't finish it that day, you come back tomorrow and you can actually pick it up where you left off."
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An IRS account is necessary to use Direct File, and after entering their information, taxpayers will learn whether they are due a refund or if they owe taxes before submitting their return to the IRS.
While spots are expected to fill quickly, the IRS plans to fully open the service by March 12th.
It's important to note the difference between IRS Free File and Direct File; IRS Free File partners with tax software companies to provide free filing for individuals making $79,000 or less.
