Personal finance

19 million people may qualify for free tax prep through the IRS this season. Here’s where they live

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A free tax filing program from the IRS fully opened in 12 pilot states on Tuesday — and officials from the U.S. Department of the Treasury have released state-by-state estimates of how many people qualify.

“Direct File eligibility is limited to those with simple tax returns this filing season,” Deputy Secretary of the Treasury Wally Adeyemo said during a press call on Monday. “But a large percentage of Americans qualify.”

The Treasury estimates that one-third of federal income tax returns could use Direct File this season and 19 million taxpayers may currently be eligible.

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However, the Direct File pilot only supports limited tax situations this season, such as Form W-2 employees who take the standard deduction. You can start the process by checking your eligibility.

Estimated state-by-state eligibility

The Treasury estimates that 19 million taxpayers may be eligible to use Direct File this season, with the following breakdown in each pilot state:

  • California: 5.2 million
  • Arizona: 690,000
  • Florida: 2.4 million
  • Massachusetts: 850,000
  • New Hampshire: 200,000
  • Nevada:480,000
  • New York: 2.8 million
  • South Dakota: 110,000
  • Tennessee: 960,000
  • Texas: 3.8 million
  • Washington: 1.1 million
  • Wyoming: 80,000

The agency hopes to see 100,000 filings this season, according to a senior administrative official. That works out to roughly 0.5% of those eligible filers.

IRS Free File returns up nearly 15%

This season, the Direct File pilot is only available in 12 states, but most taxpayers also qualify for another option: IRS Free File.

The program is a public-private partnership between the IRS and the Free File Alliance, a nonprofit coalition of tax software companies. There are eight Free File partners for 2023 federal filings and some include state returns.

You can use Free File if your 2023 adjusted gross income was $79,000 or less. Free File also offers Fillable Forms for all income levels, which is the electronic version of a paper filing.

It’s free, it’s easy to use and it’s available.
Tim Hugo
Executive director of the Free File Alliance

Some 70% of taxpayers, or roughly 100 million Americans, are eligible for Free File. “It’s free, it’s easy to use and it’s available,” said Tim Hugo, executive director of the Free File Alliance.

While only 3% of taxpayers used the program last season, Free File returns (including Fillable Forms) are up nearly 15% through March 8 compared to the same week last year, according to Hugo.

Other free tax filing options this season include Volunteer Income Tax Assistance, Tax Counseling for the Elderly and private company software.

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