Oregon Becomes First State to Offer New Free Tax Filing Option 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 Oregon will be the first new state to join IRS Direct File in 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.
Today’s announcement follows 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 from the IRS. At least 580,000 Oregonians will be eligible to use the free online filing tool next Filing Season.
“Thanks to President Biden’s Inflation Reduction Act, hundreds of thousands of Oregonians will be able to file their taxes online for free, directly with the IRS next year. Direct File will save Oregonians time and money and 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 Oregon as the first new state to offer this free new option to taxpayers.”
“This is a happy day for Oregonian taxpayers who are tired of getting ripped off by the big tax software companies year after year. Direct File is long overdue, and it’s the kind of public service the federal government ought to be providing to Americans wherever it can,” said U.S. Senator Ron Wyden. “With Direct File, the IRS built a great tool that people like because it saves time and money. I’m going to fight with everything I’ve got to protect Direct File.”
“The Direct File Program is a game-changer for taxpayers. This free filing option will save Oregonians time and money when filing next year,” said Oregon Governor Tina Kotek. “Oregon is grateful for Senator Wyden’s efforts to champion direct file and the leadership of the Biden-Harris Administration in providing equitable tax filing options for individuals nationwide – regardless of their income.”
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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