New Jersey to offer free IRS tax filing in 2025 under Biden's Inflation Reduction Act
WASHINGTON – Today, the U.S. Department of the Treasury and Internal Revenue Service (IRS) announced that New Jersey will join IRS Direct File for Filing Season 2025. The initiative is part of President Biden’s Inflation Reduction Act, aimed at improving IRS customer service and ensuring taxpayers claim eligible benefits and deductions.
Following a successful pilot program in 12 states where 140,000 taxpayers claimed over $90 million in refunds and saved an estimated $5.6 million in filing fees using the free online tool, Treasury and the IRS have made Direct File permanent and available to all states. New Jersey follows Oregon, which announced its participation last month. Over one million New Jersey residents will be eligible to use the free online filing tool next Filing Season.
“Thanks to President Biden’s Inflation Reduction Act, more than one million New Jerseyans will be able to file their taxes online for free, directly with the IRS in Filing Season 2025. Direct File will save New Jersey taxpayers time and money and help ensure they receive the tax benefits for which they are eligible,” said U.S. Secretary of the Treasury Janet L. Yellen. “Direct File is one of the many ways the Biden-Harris Administration is working to lower costs in everyday life, and we are pleased to welcome New Jersey as the next state to offer this new free option to taxpayers.”
“The Direct File tool is revolutionary to our federal tax filing process, and it will make a world of difference for taxpayers in New Jersey and across the country. Every year, when tax season rolls around, people are forced to put on their personal accounting hats. For many this can be a stressful—and expensive—time,” said New Jersey Governor Phil Murphy. “By cutting costly, for-profit tax filing software out of the equation with the free Direct File tool, we are saving individuals and families in our state time and money. I commend the U.S. Department of Treasury and the Internal Revenue Service for making this critical resource available, and I am thrilled that it will be an option for New Jerseyans in the coming Filing Season.”
“The decision of our great state to pursue free direct tax filing is a watershed event for our nine million neighbors,” said Congressman Bill Pascrell, Ranking Member of the House Ways and Means’ Oversight Subcommittee. “Thanks to Democrats’ historic investments, the IRS is creating the biggest improvements in tax filing in generations. Free direct filing will better the lives of countless Americans and soon that will include Garden Staters!”
The Treasury Department aims to expand Direct File's reach nationwide for working- and middle-class taxpayers as part of its strategic plan underpinned by resources from Biden’s Inflation Reduction Act.
BACKGROUND ON THE DIRECT FILE PILOT PROGRAM
The average American spends $270 and 13 hours filing taxes (Taxpayer Burden Survey). President Biden’s Inflation Reduction Act mandated a study on an IRS-run Direct e-File System allowing free taxpayer filings directly with the IRS. Following strong taxpayer interest revealed by this study, a pilot program was initiated during Filing Season 2024.
During this period, Direct File was available for simple tax situations across 12 states. Exceeding expectations within five weeks post extensive product testing, more than 140,000 Americans successfully filed using Direct File claiming over $90 million in refunds while saving approximately $5.6 million on federal returns alone.
Survey feedback from GSA Touchpoints indicated high satisfaction among users; 90 percent rated their experience as “Excellent” or “Above Average.” Additionally, survey respondents highlighted appreciation for straightforward usage without hidden fees or upselling attempts.
Taxpayers also valued features aiding understanding different tax situations along with credits/deductions while emphasizing confidence gained from direct IRS interactions facilitating accurate filings.
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