The IRS announced that it will continue its Free File program through October 2029, Accounting Today and CPA Practice Advisor reported.
The agency made the announcement after reaching an agreement with several tax preparation software companies that provide their online tax preparation and filing software for free.
The five-year extension agreement between the IRS and Free File Inc., a consortium of tax prep vendors, will continue the program through October 2029. Through this partnership, tax preparation and filing software providers make their online products available to eligible taxpayers. The program is available only on IRS.gov.
The companies that will continue to make the free private-sector tax software available to taxpayers are 1040Now, Drake (1040.com), ezTaxReturn.com, FileYourTaxes.com, On-Line Taxes, TaxAct, TaxHawk (FreeTaxUSA) and TaxSlayer.
“Free File has been an important partner with the IRS for more than two decades and helped tens of millions of taxpayers. This extension will continue that relationship into the future,” said Ken Corbin, chief of IRS Taxpayer Services, in the announcement. “This multi-year agreement will also provide certainty for private-sector partners to help with their future Free File planning.”
This year, Free File saw an increase of about 200,000 tax returns filed through the program, reaching 2.9 million returns as of May 11. That is an increase of 7.3 percent from the 2.7 million filed through the same period last year.
Free File is available to taxpayers with adjusted gross incomes (AGI) of $79,000 or less in 2023. It remains available on IRS.gov for taxpayers through the Oct. 15 extension deadline for 2023 tax returns.
“Free File remains an important part of the IRS portfolio to help taxpayers file their taxes for free,” said IRS Commissioner Danny Werfel in the announcement. “We were pleased to see growth in the program this year, and we look forward to continuing this important collaboration with the tax software industry. Free File was part of a successful filing season at the IRS that saw increased interest in a range of free programs to help taxpayers.”
The IRS said that it saw significant interest this tax season in its Direct File pilot, which allowed taxpayers to e-file directly with the IRS, also at no cost, for the first time. Several hundred thousand taxpayers across 12 states signed up for Direct File accounts, and 140,803 taxpayers filed their federal tax returns using the new service.