Direct File, a free tax filing service, is now available to over 1 million in Massachusetts and New Hampshire
BOSTON - The IRS launched its new Direct File tax filing program in 12 states on Monday, including Massachusetts and New Hampshire, where it says more than a million people are eligible to use the free online service "following weeks of successful testing."
Sen. Elizabeth Warren of Massachusetts said "about a third of taxpayers" in the state can use Direct File.
"This is the start of American taxpayers having a truly free and easy option to file their taxes directly with the IRS, saving people time and money," Warren said in a statement. "For years, giant tax prep companies like TurboTax and H&R Block have gamed the system to make millions by taking a bite out of refunds and monetizing personal information."
What is Direct File?
President Joe Biden's administration says the service funded by the Inflation Reduction Act is an easier way to file taxes and can even be done on a smartphone.
"Direct File shows taxpayers the math so they can be sure that their return is accurate, and they are getting the refund they are entitled to," the Treasury Department says. "Live customer service support is also available for Direct File users."
Private companies like Intuit, which makes TurboTax, have criticized the program, saying it's a "solution in search of a problem" and argue that most people can file taxes for free using their software. But a government report found that only 4% of taxpayers have taken advantage of that Free File system.
In Massachusetts, where 850,000 are estimated to be eligible, taxpayers will be directed to MassTaxConnect to do their state tax return after filing their federal taxes through Direct File. Click here for step-by-step guidelines from the state. New Hampshire does not have a state income tax.
Who is eligible for Direct File?
Besides Massachusetts and New Hampshire, Direct File is also available now in New York, Florida, California, Texas, Washington, Tennessee, Arizona, Nevada, South Dakota and Wyoming.
The service is meant for people "with simple tax situations" like a W-2 income or older Americans receiving Social Security benefits. It does not work for taxpayers with income from payment apps, independent contractor or gig work, or for people with income from a pension or retirement account. Click here to check your eligibility.
The federal tax deadline is April 15, but Massachusetts taxpayers have until April 17 thanks to the Patriots Day holiday.