More Than 700,000 Marylanders Eligible to Use Free Tax Filing Tool Next Year Made Possible by President Biden’s Inflation Reduction Act
WASHINGTON – Today, the U.S. Department of the Treasury and Internal Revenue Service (IRS) announced that Maryland will be the latest state to join IRS Direct File for Filing Season 2025. IRS Direct File was made possible by President Biden’s Inflation Reduction Act, which provided new resources for the IRS to improve customer service and ensure taxpayers claim the benefits and deductions for which they are eligible.
Following a successful Pilot Program in 12 states that saw 140,000 taxpayers claim more than $90 million in refunds and save an estimated $5.6 million in filing costs using the new free online filing tool, Treasury and the IRS announced the expansion of Direct File as a permanent offering. Treasury and the IRS have been working with interested states to offer Direct File to their taxpayers with Maryland becoming the latest state to join, following Oregon, New Jersey, Pennsylvania, New Mexico, Connecticut, North Carolina, Wisconsin, and Maine. More than 700,000 Marylanders will be eligible to use the free online filing tool next Filing Season.
“Thanks to President Biden’s Inflation Reduction Act, more than 700,000 Maryland taxpayers will be able to file their taxes online for free, directly with the IRS this coming Filing Season. Direct File will save Marylanders time and money and help ensure they receive the tax benefits they are owed,” said U.S. Secretary of the Treasury Janet L. Yellen. “After a successful pilot this Filing Season, we are pleased to expand the program as a permanent offering and welcome Maryland as the latest new state to offer this free option to taxpayers.”
“Today, we take a big step forward to make tax season easier, simpler, and more affordable for all Marylanders,” said Maryland Governor Wes Moore. “I want to thank the Biden-Harris Administration, Code for America, and our state, federal, and community partners for their support. This program has saved Americans millions of dollars in tax filing fees, and it’s going to deliver big results for the people of Maryland. Together, we will leave no one behind.”
“Tax preparation for the average working American can come with high costs and countless hours filing returns. Fulfilling tax obligations shouldn’t be more difficult than the hours you spend working,” said U.S. Senator Ben Cardin, a member of the Senate Finance Committee. “Direct File was extremely successful in making tax filing more affordable and accessible. Implementing a permanent Direct File program in Maryland will help lift a significant tax burden and benefit thousands of Maryland taxpayers.”
“Through the Inflation Reduction Act, we provided new resources for the IRS so it can better serve everyday Americans with initiatives like Direct File. Our state’s participation in this proven program will offer hundreds of thousands of Marylanders a convenient and free way to do their taxes next year – meaning less time filling out complicated returns and more money in their pockets,” said U.S. Senator Chris Van Hollen, who as chairman of the Senate Appropriations Financial Services and General Government Subcommittee oversees funding for the Treasury Department and IRS.
“Americans want – and deserve – a free, easy, accurate, and secure option to file their taxes,” said Congressman Steny H. Hoyer, Ranking Member of the Appropriations Subcommittee on Financial Services and General Government. “As House Majority Leader last Congress, I helped secure funding for Direct File in the Inflation Reduction Act to provide them that opportunity. Direct File is yet another example of Democrats’ commitment to lowering costs for Marylanders and all Americans, and I am proud that Maryland will join nineteen other states in participating in the program this next tax filing season. I appreciate the IRS and our partners in the Biden-Harris Administration for making this option permanent and available for all taxpayers.”
“The Direct File pilot program has proven its ability to ease the burden of tax season by saving taxpayers time, effort and money when filing. I appreciate the IRS’s work to expand this program across the country and am glad that starting in 2025, Marylanders will be able to use this new tool and experience a smoother, more affordable tax season,” said U.S. Congressman John Sarbanes.
“Partnering with the IRS to offer Direct File to eligible Maryland taxpayers in the 2025 tax season is an exciting opportunity and fundamental to our core priority of modernizing our agency to make government work better for all Marylanders,” Maryland Comptroller Brooke E. Lierman said. “In countries across the globe, residents enjoy much simpler return-free tax systems. While our state and nation are not there yet, with Direct File and our agency’s new Maryland Tax Connect system for individuals coming this term, Maryland will have the most transparent, efficient, and modern system in the nation.”
The Treasury Department’s goal in the coming years is to expand the reach and tax scope of Direct File to provide an option for working-and middle-class taxpayers nationwide. Direct File is central to the Biden-Harris Administration’s efforts to deliver modern, world-class customer service using Inflation Reduction Act resources. Direct File also advances a goal of the IRS’s Strategic Operation Plan (SOP) to ensure that taxpayers receive tax credits that they are eligible for, including the Child Tax Credit and Earned Income Tax Credit. The IRS will continue to improve the product over time and ensure that it remains free, secure, and easy to use.
BACKGROUND ON THE DIRECT FILE PILOT PROGRAM
The average American spends $270 and 13 hours filing their taxes. (Taxpayer Burden Survey) President Biden’s Inflation Reduction Act required the IRS to study the potential for an IRS-run Direct e-File System that would allow taxpayers to file taxes for free, directly with the IRS. After reviewing the report, which showed strong taxpayer interest in a free IRS filing option, the Treasury Department initiated a pilot of IRS Direct File during the 2024 Filing Season.
In Filing Season 2024, Direct File was available to taxpayers with simple tax situations in 12 states. The Pilot exceeded expectations with more than 140,000 Americans successfully filing in the five weeks the program was widely available following extensive product testing. These filers claimed more than $90 million in refunds and saved an estimated $5.6 million in tax preparation fees on their federal returns alone.
Direct File users also reported a high degree of satisfaction and quick answers to their filing questions. In a GSA Touchpoints survey of more than 11,000 Direct File users, 90 percent of respondents ranked their experience with Direct File as “Excellent” or “Above Average.” A majority of survey respondents who filed taxes in the prior year reported having to pay to prepare their taxes last year. Among survey respondents, 47 percent of users paid to file their taxes last year and 16 percent did not file last year at all.
In Treasury and IRS engagements with Direct File users, taxpayers relayed that Direct File was straightforward to use, and they valued features that allowed them to learn more about different tax situations, credits, and deductions. Taxpayers emphasized their appreciation for the fact that Direct File is always free and there are no hidden fees or attempts to upsell users as they moved through the filing process. Taxpayers also shared that filing directly with the IRS gave them confidence and that they were able to quickly fix mistakes and get their taxes filed accurately.
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