New York State and the Internal Revenue Service have developed a new program that allows eligible New Yorkers to e-file their federal and state personal income tax returns for free.
The IRS's Direct File pilot program will open on March 12 to eligible New Yorkers reporting certain types of income and claiming certain credits and adjustments.
Meanwhile, New York Governor Kathy Hochul and the civic technology nonprofit Code for America have also set a March 12 launch date for a new tool to make it easier for eligible New Yorkers to file their state taxes for free. FileYourStateTaxes — a joint effort of the state and the nonprofit — will allow eligible New York residents to file their state taxes for free and provide integration with the IRS's Direct File pilot, enabling eligible individuals to file federal tax returns online as well.
"Filing your taxes should be free and simple, and starting March 12, we're launching a new, no-cost option to streamline the process for millions of New York taxpayers," Hochul said in a statement Wednesday. "Thanks to our partnership with Code for America and the IRS, New York is delivering on its commitment to helping New Yorkers access vital government services, meet their tax obligations, and recover tax benefits."
The IRS has been pilot testing its
"Direct File is a pilot program," said IRS spokesperson John Fuld. "It's free. It's being offered in 12 states for the pilot. New York is one of them, and it's open right now for taxpayers in New York to go ahead and use."
The 12 states where the system is available include Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.
Hochul's office said Direct File and FileYourStateTaxes will be fully open to all eligible taxpayers on March 12. Both products have been undergoing iterative rounds of scaled testing over the past several weeks and are currently available to the public in their final beta testing phase. Interested taxpayers can start their free tax filing process right away at
Eligibility to participate in the Direct File pilot is limited to filers reporting certain common types of income and claiming common credits and deductions. They include taxpayers who:
- Have lived in New York all year and don't have income from another state;
- Whose only income sources are wages, Social Security benefits, unemployment benefits, and/or up to $1,500 of interest;
- Who want to claim the Earned Income Tax Credit, Child Tax Credit or Credit for Other Dependents; and,
- Only plan to claim the standard deduction and/or deductions for student loan interest and educator expenses.
Approximately one-third of taxpayers may qualify for the pilot program, according to Fuld.
"Some deductions are standard deductions — student loan interest, educator expenses — but it's not going to be for the people who are in the gig economy or business income or the higher-income folks earning more than $200,000," said Fuld.
At least one other state besides New York — Arizona — appears to be part of the FileYourStateTaxes program. There will be links in the Direct File program to the free tax prep programs offered by the states. California, for example, has long offered a
"We don't do your state taxes, but there will be a link to help you do your state taxes and it will link you over to, say, New York, which was one of our partners to do the state taxes," said Fuld.
For now Direct File is just a pilot test and it's one option in addition to the Free File program that the IRS has long offered with a group of commercial tax prep software providers.
"The Direct File pilot is for the tax season," said Fuld. "At that point, there will be an evaluation, but it's just another option for taxpayers to be able to file their taxes directly with the IRS. If taxpayers get a refund, normally you can get that within 14 to 21 days if you have direct deposit information here with the program."
