The 2025 tax season is rapidly approaching, and many of us are preparing to file our tax returns. Well, that isn’t such wondrous news for those in some states. While the IRS has expanded its Direct File system, now allowing eligible taxpayers to file their federal income taxes free of charge, not all have bought into this offer in their home states. So, this paper covers the excluded states by Free File and it’s all about for their tax filers.
Understanding the IRS Direct File Program
The IRS Direct File program was set up to offer taxpayers a low-cost, straightforward way of filing federal tax returns directly with the IRS, clear of the fees for filing. It has grown to 25 states in the year 2025, hence opening up possibilities for millions to file their taxes for free. Unfortunately, this has left out a number of states, which means those states’ residents looking to file for free will need to look to other options for filing their tax returns.
States offering Free File
During the 2025 tax season, eligible taxpayers can access the Direct File system in the following states;
- Alaska
- Arizona
- California
- Connecticut
- Florida
- Idaho
- Illinois
- Kansas
- Maine
- Maryland
- Massachusetts
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- Oregon
- Pennsylvania
- South Dakota
- Tennessee
- Texas
- Washington
- Wisconsin
- Wyoming
The above list constitutes those states where the taxpayers will be offered free filing, and around 30 million people are expected to take advantage of it as detailed with this article, When does the IRS start accepting tax returns? These are the states where you can file your tax data for free with Free File.
States which do not offer Free File access
Conversely, some states would not be participating in the IRS Direct File in 2025. They include the following;
- Alabama
- Virginia
- Montana
- Nebraska
This decision has been arrived at owing to several factors including legal constraints and the failure to develop an adequate technological infrastructure necessary for the operations of the new system.
Taxpayers impact in non–participating States
This would make them seek alternative means of filing their taxes. Another alternative available to taxpayers is the use of paid tax preparation software. Examples include TurboTax or H& R Block. They generally have a very user-friendly interface and questionnaires that lead users through the process, but they do come at a cost; this can be as low as $20 and can go up to $150 or more.
- Free File options: Many tax preparation companies offer free versions of their software, usually for simple returns. However, eligibility may be based on income limits and individual state qualifications.
- Paper filing: Taxpayers can also e-file by preparing paper forms and mailing them in to the IRS. This is absolutely free and yet not very handy and much slower than e-filing methods.
- Local assistance programs: Most of the community groups and volunteer organizations provide free tax preparation services during the tax season. Some programs like VITA – Volunteer Income Tax Assistance, helps low-to-moderate-income individuals to file their taxes for free.
Reasons for non-participation
The reasons why many states do not participate in the Direct File program are numerous:
- Technological limitations: Some states lack the infrastructure or the resources to build an efficient online filing system that can pass IRS standards.
- Legal impediments: Legal impediments have also been raised in many states over the legality of IRS’s authority to institute a Direct File program without direct legislative authorization. The Governor of Virginia cited legal impediments as one of the reasons for opting out.
Surviving tax season without Free Filing
With the 2025 tax season just around the corner, taxpayers in nonparticipating states have limited options to file their taxes absolutely free. Many of these will go to using the IRS’s expanded Direct File program, but the rest either have to pay for the services or go through other means that might accrue extra costs.
Taxpayers should review their situation, look carefully at all their resources, so they may fulfill their filing requirements without experiencing unwarranted financial stress. Always keep in mind that it is important to update changes in tax laws and available options for filing for a smooth tax season.
Read more: IRS to send refunds soon: how to check the status of your tax refund
Read more: Bad news for the Child Tax Credit – This is the deadline for Congress to make changes to the CTC for future tax returns
