Dr. Nikia Owens, President of Campaign for Working Families, and U.S. Secretary of the Treasury Janet L. Yellen.
All photography by Andrew Smith.

Campaign for Working Families‘ Roundtable Discussion on IRS Modernization and Taxpayer Support featured in CBS. Full story on: https://www.cbsnews.com/philadelphia/news/irs-direct-file-tax-pennsylvania

CBS NEWS PHILADELPHIA cbsnews.com July 30, 2024, Campaign for Working Families Broad Street Office

PHILADELPHIA (CBS) — Pennsylvania will offer the IRS’s free electronic tax-filing system Direct File to taxpayers next tax season, Treasury Secretary Janet Yellen and Gov. Josh Shapiro announced Tuesday.

Yellen said Direct File allows taxpayers to file their taxes online directly with the IRS for free, offering residents an alternative to using tax-prep programs such as TurboTax and H&R Block or hiring an accountant. At least 1.5 million Pennsylvanians will be eligible to use the tool in 2025, according to a press release.

Yellen and Shapiro were in Philadelphia on Tuesday for a Campaign for Working Families roundtable on IRS modernization and taxpayer support. The treasury secretary said Direct File is about “making it simpler and cheaper for Americans to pay their taxes and get back what they’re owed.”

“It should be easy to meet your tax obligations and claim the credits, deductions and refunds for which you’re eligible,” she said.

The IRS tested Direct File during a pilot program in 2024, which Yellen called a “significant success.”

On Tuesday, Yellen said that by the final week of the pilot program, the tax agency processed more than 5,000 accepted returns each day with more than 140,000 taxpayers using Direct File. She added that Direct File saved taxpayers $5.6 million in federal filing fees, $90 million were issued in refunds and 90% of survey respondents said the service was “excellent or above average.”

“It saves taxpayers money upfront,” Yellen said. “They do not have to pay to prepare or file their returns, and it saves them money on the backend by helping them get their refunds and claim the tax credits they deserve.”

Shapiro, who is among the names being considered as Vice President Kamala Harris’s running mate, said Direct File will allow Pennsylvanians to file both their state and federal taxes online.

The governor called the tax agency’s new tool a “game-changer” that will allow residents to access government more easily.

“It is on us to make sure that we speed up government, that we make it work at the speed of business,” Shapiro said.

The IRS launched the Direct File pilot program using money from the 2022 Inflation Reduction Act, which directed $80 billion to the agency. IRS Commissioner Daniel Werfel said last year the agency’s goal is to “roll it out in increments that get larger and larger, consistent with how products like this are rolled out in the private sector.”

Americans spend upward of $11 billion each year on tax preparation services, accountants and others who help them complete their returns. On average, Americans spend $270 and 13 hours filing their taxes, according to the U.S. Department of Treasury.

Shapiro said Tuesday that Direct File will allow Pennsylvanians to be “far more efficient in their lives.”

“This is going to allow people ease of access to their government, showing them that there is no wrong door,” Shapiro said. “Saving them hundreds if not thousands of dollars on software or other services that maybe they really didn’t need in the first place.”

CBS News

Tom Dougherty is a digital content producer for CBS Philadelphia. Before joining CBS Philadelphia, Tom covered sports for NBC Sports Philadelphia. He currently covers breaking news and sports.

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