How Californians can file their taxes for free this year

Millions of California residents can now file their taxes for free directly with the IRS as part of a nationwide pilot program.

Direct File is an online tool that launched Tuesday after weeks of testing.

The tax filing tool was launched as part of the Biden Administration’s landmark Inflation Reduction Act, which was passed in 2022.

Direct File is an alternative service to the myriad for-profit tax filing services that consumers are familiar with, including H&R Block and Turbotax.

Americans in 12 states who have “simple tax situations” can file their taxes through Direct File. The IRS says the tool is free, secure and has no hidden fees.

It also works well on smartphones and tablets, in addition to computers, and live customer service support is also available for users, according to U.S. Department of the Treasury.

“Direct File shows taxpayers the math so they can be sure that their return is accurate, and they are getting the refund they are entitled to,” officials said. “Initial users have saved hundreds of dollars and reported that the tool is simple and straightforward to use.”

According to the Associated Press, the first person to use the new service was able to file their taxes in about an hour and saved nearly $400.

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The ability to file taxes directly with the federal government brings the U.S. in line with dozens of other countries that offer those same tax preparing services for free.

The Treasury Department estimates one-third of all federal tax returns could be prepared with Direct File were the program to launch nationwide.

As many as 19 million Americans in the 12 chosen states could file their taxes for free through the pilot program this tax season, including more than 5.2 million in California.

Here’s a breakdown of the estimated number of eligible Americans in the 12 pilot program states.

But not all Californians will be eligible to use the free service.

According to the Treasury Department, eligible filers include:

• A parent with W-2 income that claims the Earned Income Tax Credit and Child Tax Credit.

• A recent graduate with W-2 income, who pays student loan interest.

• A retired senior citizen with Social Security income.

Still, millions of Americans will be able to file their taxes for free with the federal government for the very first time thanks to the pilot program, and Deputy Secretary of the Treasury Wally Adeyemo says Direct File will ensure that taxpayers “get their full refund by showing them the numbers and explaining credits they are eligible for.”

Adeyemo says the service was launched at the behest of President Biden in an effort to save taxpayers time and money.

Direct File is currently only in use for filing federal income taxes. Those filing in states that require filing state taxes will have to file those separately.

When asked by the AP if Direct File would return in 2025, possibly to more states, IRS Commissioner Daniel Werfel said he was hesitant to jump to that conclusion, but said early signs were “encouraging.”

The deadline to file last year’s tax returns is Monday, April 15.

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