The IRS is launching an innovative Direct File project for the 2024 tax season, offering a free IRS-run pilot option for eligible taxpayers in 13 states. This pilot, part of a broader transformation initiative, aims to assess customer support and technology needs, providing a platform for evaluating potential operational solutions​.

The Direct File pilot allows taxpayers in participating states to electronically file their federal tax returns directly with the IRS for free. Eligibility is limited to certain types of income, credits, and deductions, targeting taxpayers with relatively simple returns. This move aligns with the 2022 Inflation Reduction Act’s provisions for IRS funding to improve taxpayer services, technology, and enforcement, including studying free, direct e-file programs​.

The pilot is being continuously tested to ensure user-friendliness and clarity. Its introduction in 2024 will be phased, initially reaching a small group of eligible taxpayers before expanding access. While Direct File doesn’t replace existing filing options, it adds to the array of choices available to taxpayers, including the use of tax professionals, software, and free filing services​.

The pilot’s scope covers individual federal tax returns and is limited by the types of income, tax credits, and deductions it supports. It doesn’t prepare state returns but guides taxpayers in completing them separately. The anticipated tax scope includes W-2 wage income, Social Security and railroad retirement income, unemployment compensation, and certain tax credits like the Earned Income Tax Credit and Child Tax Credit​.

This pilot aims to test and refine the Direct File system, focusing on technology, customer support, state integration, fraud detection, and overall taxpayer experience. The IRS plans to share the results publicly once available​.

For more details, refer to the full article on the IRS website: IRS Direct File Project for 2024 Tax Season.