The IRS has confirmed that its free Direct File program will not be offered for the 2026 tax filing season, meaning millions of taxpayers who filed directly with the agency in 2024 and 2025 will have to switch to other options. This change stems from a Trump‑era tax bill and a Treasury report that together cleared the way to shut down the program despite strong satisfaction scores from users.
What Direct File was – and why it mattered
Direct File was the IRS’s own online tool that let eligible taxpayers prepare and file their federal returns directly with the government at no cost. It launched as a small pilot for the 2024 season in 12 states, then expanded in 2025 to 25 pilot states and territories, covering more than 30 million eligible filers.
Unlike the long‑standing Free File program, which relies on private tax software companies, Direct File was built and run by the IRS itself, with funding from the Inflation Reduction Act. Early evaluations showed very high user satisfaction, with most participants rating the experience as excellent or above average and roughly 300,000 accepted returns in the 2025 season, more than double the prior year.
How and why the program is ending
In early November 2025, IRS official Cindy (Cynthia) Noe emailed revenue departments in 25 participating states to say that “IRS Direct File will not be available in Filing Season 2026” and that no relaunch date had been set. That email, later published by several outlets, confirmed that the Direct File website is now closed and past users cannot log in to file 2026 returns through it.
The decision followed an October 2025 Treasury task‑force report, required by the Trump administration’s “One Big Beautiful Bill Act,” which examined replacing Direct File with expanded public‑private partnerships. The report cited relatively high per‑return costs (about $41 million total and roughly $138 per return in the 2024 season) and limited eligibility as reasons to wind it down, even though participation had more than doubled year over year.
What options taxpayers will have instead in 2026
With Direct File gone, taxpayers will have to rely on a mix of existing options for the 2026 filing season:
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IRS Free File: Free online prep through private partners for eligible filers, generally those with adjusted gross income at or below about $84,000 for 2025 returns.
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Free fillable forms: Online versions of paper forms for self‑prepared returns, with no guided help.
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Commercial software: Paid and limited free tiers from companies like TurboTax and H&R Block.
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In‑person help: Volunteer Income Tax Assistance (VITA), Tax Counseling for the Elderly (TCE), and paid preparers.
Treasury and IRS officials say they intend to “improve” Free File and other partnerships, arguing that the private sector can handle no‑cost filing more efficiently than Direct File did. Critics respond that Free File’s income caps, upsells, and complexity were exactly why Direct File was created in the first place.
Who is most affected by the shutdown
The end of Direct File will be felt most by:
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Middle‑income filers in pilot states who were too high‑income for Free File but simple enough for Direct File’s limited forms
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Taxpayers who liked filing directly with the IRS without sharing data with a private software company
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Residents of states that integrated their systems with Direct File so users could move seamlessly from federal to state returns
For example, Illinois officials noted that their Direct File link had allowed users to file federal returns and then jump straight into the state’s free MyTax Illinois system. New York and California leaders have publicly criticized the shutdown as a setback for working families trying to avoid software fees.
What to expect for costs and data privacy
Without Direct File, many of its former users will likely migrate back to commercial software, which can mean:
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Higher out‑of‑pocket costs for tax prep and e‑filing
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More aggressive marketing of add‑on products (audit protection, credit monitoring, etc.)
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Greater exposure of sensitive financial data to private companies and third‑party trackers
Advocates warn that this shift effectively steers taxpayers toward products from firms that have previously been accused of misleading “free” offers, while removing a fully government‑run alternative that did not monetize user data. Supporters of the shutdown, including some Republican lawmakers and industry voices, argue that competition among private providers will keep prices reasonable and innovation high.
At‑a‑glance: Direct File vs. your 2026 options
Here is a simple comparison of what is changing between the 2025 and 2026 filing seasons:
| Feature | Direct File in 2025 | 2026 landscape without Direct File |
|---|---|---|
| Who ran it | IRS (public, non‑profit) | Private software + IRS Free File partners |
| Cost to eligible taxpayers | $0 for federal return | $0 for some via Free File; many others pay software fees |
| Income eligibility (guided) | Up to roughly $200,000+ with simple returns | Free File generally up to ~$84,000 AGI; above that, paid tools |
| Availability | Limited pilot in 25 jurisdictions | Nationwide, but only via private or existing free tools |
| Data handling | Directly with IRS only | Shared with private vendors, subject to their policies |
How taxpayers can prepare for the 2026 season
Even though the loss of Direct File is frustrating for many, there are practical steps you can take now:
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Check whether you qualify for Free File based on your income and start comparing partner offers early.
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Look into VITA or TCE sites in your area if you have low to moderate income, are elderly, or need in‑person help.
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If you must use commercial software, watch for upsells and make sure you really need any paid add‑ons.
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Consider organizing your tax documents digitally so you can switch providers more easily without losing track of prior‑year data.
Most importantly, do not wait until the last minute in 2026 to figure out your new filing method; former Direct File users in particular will need time to choose a replacement that fits their budget and comfort level.
FAQs
Q1 Can I still use my old Direct File account in 2026?
No, the Direct File website is closed; past users cannot file 2026 returns there and must choose another option.
Q2 Does this change affect the IRS Free File program?
Free File continues, and officials say they want to expand or improve it, but it is still run with private software partners, not directly by the IRS.
Q3 Will another government‑run filing tool replace Direct File soon?
Treasury’s report focuses on public‑private alternatives and does not set any timeline for a new government‑built tool, so taxpayers should assume Direct File is gone for the foreseeable future.
