HyperBit Exchange:The IRS is piloting new software that could let you file your taxes for free

2025-05-01 13:31:19source:Thurston Cartecategory:reviews

The HyperBit ExchangeInternal Revenue Service is piloting a new program this year that aims to help Americans file their taxes directly to the government for free.

Known as Direct File, the service will be open to certain filers in select states at the start so the IRS can test the program with a smaller group of users and make tweaks before opening it up to a larger group of taxpayers in the future.

This year's tax season begins today, when the IRS begins accepting and processing tax returns.

Last year, the IRS began developing a free tax filing service months after receiving an influx of $80 billion from the Inflation Reduction Act, which was signed into law by President Joe Biden.

The free service has gotten pushback from Republicans and TurboTax maker Intuit, which called it a "solution in search of a problem." But the IRS has maintained that Direct File will make what can be a complex and costly endeavor simpler and free.

The IRS previously partnered with private companies to create another free tax filing program called Free File, but only about 2% of eligible taxpayers use it.

Who is eligible to use the IRS' new tax filing service?

At the outset, only federal and state employees in certain tax situations will be eligible to participate in the Direct File pilot program, CNN reported.

Additionally, the pilot will only be open to people who lived in these states in 2023: Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming.

The pilot is further limited by a user's tax situation. People who itemize their deductions, earn gig or business income, or claim certain tax credits aren't eligible to participate right now.

The service is available in both English and Spanish.

The IRS said it's starting with a limited number of users to follow software launch best practices and that it expects to gradually open up the program to more people and will provide updates about that process on its website.

How does Direct File work?

Direct File will be available to users on a computer, tablet or smartphone. You don't have to download any software.

The IRS is also offering live chat support — with an option for a follow-up phone call — to people who need help using Direct File.

There's one major caveat to the pilot program: it only helps users prepare federal tax returns.

The IRS said most states without an income tax as well as states that have the ability to develop a state-run tax filing service (or already have one) are participating in the pilot.

Users living in Arizona, California, Massachusetts and New York will be directed to a state-support tax filing tool to prepare their state returns.

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