Exciting news from the Biden administration: over 1.5 million Americans are set to benefit from a new tax filing option!
Starting in January, more than 1.5 million residents in Pennsylvania will be able to submit their simple state and federal tax returns online for free. Treasury Secretary Janet Yellen shared the announcement on social media platform X this Tuesday.
“Paying your taxes and claiming your eligible credits and deductions should be straightforward. Unfortunately, @IRSNews has been underfunded, leaving many taxpayers without the assistance they need,” Yellen expressed on X.
The Direct File tool aims to streamline the filing process, saving taxpayers both time and money by eliminating the need for expensive third-party services that often cost hundreds of dollars. Yellen emphasized this benefit in her remarks.
Earlier this year, the IRS tested the Direct File pilot program, which successfully processed over 5,000 returns daily, with 140,000 users helping them save a total of $5.6 million on federal filing fees.
This pilot program was initially available in 12 states, including Arizona, California, and Texas. The feedback has been overwhelmingly positive, with 90% of users rating the service as “excellent or above average.” This initiative was funded by the 2022 Inflation Reduction Act, which allotted $80 billion to the IRS.
IRS Commissioner Daniel Werfel mentioned that the rollout would happen gradually, reflecting practices used in the private sector.
Every year, Americans typically spend over $11 billion on tax preparation services—averaging about $270 and 13 hours on the entire process before the introduction of Direct File.
“This will provide people with easier access to government services and save them hundreds or even thousands on unnecessary software,” noted Pennsylvania Governor Josh Shapiro.