IRS Direct File Ending Next Year: What Taxpayers Should Know

If you used the IRS’s free Direct File program this year, don’t count on it next time. The IRS under the Trump Administration just announced that its free online filing tool won’t return for the 2026 tax season.

Direct File was designed to make tax filing easier and cheaper. It allowed qualifying taxpayers to file federal returns directly with the IRS without paying third-rave companies. The program launched in 2024 as a pilot and expanded to more than 20 states in 2025. It helped hundreds of thousands of filers submit returns with no fees.

But IRS officials said the usage numbers didn’t justify continuing the program. Although around 300,000 people used it, that’s still a small percentage of all U.S. taxpayers. The program also faced strong political pushback and criticism from private tax software companies that claimed the government shouldn’t compete with them.

Several factors contributed to the decision. Some lawmakers argued the government-run filing system cost too much and overlapped with existing free services. Others questioned whether taxpayer money should fund a tool that only a small group used.

Private companies like TurboTax and H&R Block also lobbied against it, arguing it would hurt competition. Ultimately, the IRS decided to focus on other modernization efforts instead of continuing Direct File.

If you planned to use Direct File next year, you’ll need another option. The IRS will still offer the Free File program, which partners with private software companies to provide no-cost filing for eligible taxpayers. However, those options come with income limits and fewer features than Direct File offered.

For people with more complex tax situations, like business owners, gig workers, or those who itemize deductions, this change could mean paying for software or hiring a professional. That could cost anywhere from $50 to several hundred dollars, depending on your needs.

Direct File was one of the few truly free and simple ways to file directly with the IRS. Many advocates called it a win for low- and middle-income taxpayers. Without it, millions may lose access to a transparent, no-cost option.

While there’s a chance a new or improved version could return in the future, the IRS hasn’t confirmed any replacement yet.