Pennsylvania to join IRS Direct File free tax program

Pennsylvania will become the 15th state to join the IRS Direct File free tax program next tax season, the Treasury Department and the IRS said Tuesday.

At least 1.5 million Pennsylvanians are expected to be eligible to use the free online filing tool next filing season. The announcement comes a week after New Jersey joined the program.

The free online filing system was pilot tested last tax season in 12 states, and the IRS announced plans in May to make the program permanent. It invited all 50 states, as well as the District of Columbia, to join the program. The dozen states where it was available include Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming. Last month, Oregon became the first new state to join the program for next year, New Jersey became the fourteenth state, and now Pennsylvania will be 15th.

“Filing your taxes should be free and easy — that’s why we’re improving our digital services and adopting IRS Direct File here in Pennsylvania,” said Pennsylvania Governor Josh Shapiro in a statement. “Thanks to the Biden-Harris Administration’s Direct File initiative, Pennsylvanians will be able to save money by filing both their state and federal taxes at no cost on an easy-to-use platform. There should be no wrong door to access government services, and the Shapiro Administration will continue to bring human-centered, user-friendly, reliable and accessible digital services to every Pennsylvanian to help lower costs and break down barriers.”

Shapiro is reportedly on the short list of contenders to become Kamala Harris’s running mate as vice president in the November election. However, the outcome of the election could also result in budget cuts at the IRS, and Republicans in Congress and 12 state attorneys general have expressed opposition to the Direct File program.

The IRS Direct File program was sparked by a provision in President Biden’s Inflation Reduction Act requiring the Treasury and the IRS to study the feasibility of a free tax-filing system. After the study was released last May, a team at the IRS, led by acting transformation and strategy officer Bridget Roberts, quickly developed the system in time for tax season this year.

“Today, and thanks to Governor Shapiro, Pennsylvania joins the growing list of states that have committed to join Direct File, with plans to bring Direct File to more than 1.5 million Pennsylvania residents starting next January,” said Treasury Secretary Janet Yellen during an event in Philadelphia. “Taxpayers deserve to see how our tax system should work. Thanks to the IRA, we are finally able to make that happen.”

Last tax season, over 140,000 taxpayers claimed more than $90 million in refunds and saved an estimated $5.6 million in filing fees using the free tool.

“The numbers don’t lie: Direct File is a game-changing, commonsense program that enables Americans to do their taxes easily, securely, and affordably,” said Senator Bob Casey, D-Pennsylvania, in a statement. “Thanks to this program, Americans can confidently file their taxes and keep more of their hard-earned dollars. I fought to expand Direct File to our state to put more dollars back in Pennsylvanians’ pockets and to lower costs for Pennsylvania families.”