Taxpayers in Maryland will have a new option for filing their taxes in 2025. A partnership between Code for America and Maryland will enable residents to file their federal and state tax returns online for free. Maryland is the ninth state to announce plans to allow its residents to file taxes through IRS Direct File. This partnership will make FileYourStateTaxes, a civic tech nonprofit organization’s integrated state tax filing tool, available to Direct File taxpayers in Maryland. This means that Direct File users in Maryland can also file their state returns for free.
As part of a pilot program in 2024, eligible taxpayers in 12 states could file their federal tax returns for free directly with the IRS using Direct File. The pilot was announced in October 2023 and closed in April 2024. The IRS reported that the pilot was a success, with several hundred thousand taxpayers across 12 states signing up for Direct File accounts. The IRS has now made Direct File available to all 50 states and the District of Columbia for the 2025 filing season. The program aims to make tax filing easier and more efficient for taxpayers.
Code for America has also partnered with states like Arizona and New York to make free online filing available. In Maryland, the partnership with Code for America will make the state’s tax filing process more transparent, efficient, and modern. The goal is to provide taxpayers with a seamless experience when filing both federal and state tax returns. The key to the program is federal-to-state data transfer, allowing Direct File users to populate their state returns with federal return information.
The Direct File program is driven by the Inflation Reduction Act, which tasked the IRS with delivering a report on the cost of developing and running a free direct e-file tax return system. The IRS released the report in May 2023, studying how an IRS-run free direct e-file tax return system might work. The program aims to evaluate the costs, benefits, and operational challenges associated with providing the option to taxpayers. Most taxpayers surveyed by the agency reported interest in using an IRS-provided tool to prepare and file their taxes.
Code for America is a civic tech nonprofit that works with community leaders and governments to build equitable, accessible digital tools and services. The organization believes that government can work for and by the people in the new digital age. In addition to the Direct File program, Code for America has worked on projects like GetCTC.org and GetYourRefund.org to help families claim tax credits and successfully file their taxes. The goal is to make government services more accessible and efficient for all taxpayers.
Overall, the partnership between Code for America and Maryland, as well as the expansion of the Direct File program, aims to streamline the tax filing process for taxpayers in Maryland and across the country. By providing free online filing options and leveraging federal-to-state data transfer, the program simplifies the tax filing experience for eligible taxpayers. As the program expands to more states and improves over time, the goal is to make tax filing easier, more efficient, and more transparent for all taxpayers.
