Update! Yes and no. Available now for some people in some states.

The IRS is making filing simple tax returns easier. Direct File, A new free e-file pilot program is NOW available to a limited number of states with a gradual rollout. Taxpayers will be able to file directly with the IRS instead of a third party. Direct File works on mobile phones and computers. It can even do Earned Income Credit. But it’s not available or best for everyone because not all credits are currently functional. In time they will probably be added. The previous free e-file options through third party software are still available as well for those who qualify.

Why would you want to use Direct File?

It’s free, leaves out the middle man which should make it process faster, and you’ll probably get a bigger refund than if you pay someone to file for you. But you must be sure to have all your documents and enter the numbers correctly. But it’s not available in all states or for everyone yet. Though Direct File has been announced , I could not find an available site yet.

Who can use the new Direct File option ?

In a nutshell: only simple returns, no business income or self employment including gig jobs. No marketplace insurance. However , those with Social Security or unemployment income are eligible. And you’ll have to set up an IRS account and verify your identity with approved identification.

According to the IRS website , these are the qualifications.

“You may be eligible to join the pilot if you live in a pilot state and report these items on your 2023 federal tax return:”

Income

• W-2 wage income
• SSA-1099 Social Security and RRB -1099 railroad retirement income 
• 1099-G unemployment compensation
• 1099- INT interest income of $1,500 or less

Credits

• Earned Income Tax Credit
• Child Tax Credit
• Credit for Other Dependents

Deductions

• Standard deduction
• Student loan interest
• Educator expenses

Who cannot or shouldn’t Direct File ?

For taxpayers who itemize or get their health insurance through the Marketplace (Obamacare) and receive a 1095-A, or who qualify for a credit for putting money into a retirement plan (a little known credit called Saver’s Credit), or get a credit for child or dependent care, this option would not work . You don’t want to miss out on these credits. But the IRS says that other e-filing options may be available depending on income.

“The pilot is not an option for if you:

• Have other types of income, such as gig economy or business income
• Itemize deductions
• Claim other credits like the Child and Dependent Care Credit, Saver’s Credit or the Premium Tax Credit”

Create your account on IRS.gov

Of course , to use Direct File, you are required to create an online account with the IRS and verify your identity using ID.me. This process can be a little tedious. You’ll need a photo of an approved identification card or document and a selfie. Whatever you do, don’t lose your account information. Getting back into your account is not as easy as other websites.

Check the IRS Direct File site for timing and more details.