In a major shift introduced by the Biden administration, over 1.5 million Americans, especially Pennsylvanians, can now file their state and federal tax returns online for free for the first time. This new option is available to those with simple tax returns.
This new option, announced by Treasury Secretary Janet Yellen, could potentially expand to other states and include more complex returns in the future.
Treasury Secretary Janet Yellen highlighted the importance of this development, emphasizing the ease it should bring to meeting tax obligations and claiming eligible credits, deductions, and refunds. She pointed out that the IRS has been underfunded, leading to a lack of adequate support for taxpayers.
The introduction of this tool is part of the Biden-Harris Administration’s efforts, under the Inflation Reduction Act, to improve taxpayer services both in-person and online.
Biden Administration Introduces Free Online Tax Filing for Over 1.5 Million Pennsylvanians
The new direct file tool is designed to save taxpayers both time and money by providing a free, direct filing option, avoiding the high costs associated with third-party services. During its initial pilot phase, the IRS successfully processed over 5,000 returns daily, with a total of 140,000 users saving $5.6 million in federal filing fees.
The pilot program was conducted in twelve states, and the response was overwhelmingly positive, with 90 percent of users rating the service as “excellent or above average.”
This initiative marks a significant improvement for Pennsylvania taxpayers, as noted by financial literacy instructor Alex Beene. The new system is expected to make tax filing faster, more efficient, and cost-effective. The pilot program was funded by the 2022 Inflation Reduction Act, which allocated $80 billion to the IRS, allowing for this progressive rollout similar to private sector practices.
The U.S. Treasury Department noted that Americans previously spent over $11 billion annually on tax preparation services, averaging $270 and 13 hours per taxpayer. Pennsylvania Governor Josh Shapiro praised the new tool for making government services more accessible and reducing unnecessary expenses on tax preparation services.
This initiative is seen as a step towards simplifying the tax filing process and ensuring that taxpayers receive the support they need.
