Next year, filing state and federal taxes may be free through new program

Governor Josh Shapiro along with U.S. Department of the Treasury Secretary Janet Yellen and other state representatives announced that Pennsylvania will join IRS Direct File for filing season 2025, helping residents to gain access to a free online tool to file their federal taxes next year. Direct File will build on myPATH, Pennsylvania’s free tool to file state income taxes and apply for tax cuts like the Property Tax/Rent Rebate.

Direct File was first launched as a pilot program across 12 states earlier this year. According to the state’s announcement 140,000 taxpayers claimed more than $90 million in refunds and saved an estimated $5.6 million in filing fees using the free online filing tool.

”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 Shapiro. “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.”

Using the Direct File online filing tool, qualifying taxpayers will first be able to complete their 2024 federal tax returns. Following that step, Direct File will direct qualifying taxpayers to Pennsylvania’s state income tax filing system, myPATH, where they will be able to file and complete their 2024 Pennsylvania state returns. Some information, including W-2s and demographic information, will automatically be uploaded to their state return to help save time and ensure folks don’t have to input their information twice.

The U.S. Treasury’s goal in the coming years is to expand the reach and tax scope of Direct File to provide an option for working-and middle-class taxpayers nationwide. The IRS will continue to improve the product over time and ensure that it remains free, secure, and easy to use, per the announcement.