CHARLOTTE, N.C. — North Carolinians can file their federal and state tax returns directly with the IRS starting in 2025, Gov. Roy Cooper announced on Friday.
Beginning with the 2025 tax filing season, eligible North Carolina residents will be able to submit their state and federal returns as part of the IRS Direct File program. Approximately 1.25 million North Carolinians are expected to be eligible for IRS Direct File, according to Cooper's office.
“Filing taxes is often stressful, expensive, and time-consuming for North Carolina taxpayers and families. The IRS Direct File tool helps remove unnecessary hurdles and fees by allowing taxpayers to file directly with the IRS for free, keeping more money in their pockets,” Cooper said in a news release. "This resource will help ensure qualifying families receive tax credits. We are grateful to the Biden-Harris Administration for their diligent work in developing this tool and making it available at no cost to North Carolinians. We look forward to rolling it out as an option this coming tax season.”
The IRS was tasked with looking into how to create a “direct file” system as part of the money it received from the Inflation Reduction Act signed into law by President Joe Biden in 2022. It gave the IRS nine months and $15 million to report on how such a program would work.
“The IRS has been underfunded for decades, so taxpayers haven’t gotten the support they deserve,” Treasury Secretary Janet Yellen told reporters in a call Thursday. “Thanks to the Inflation Reduction Act, we’re changing this.” The IRS is part of the Treasury Department.
The U.S. Department of Treasury launched the direct file pilot program in 2024, allowing 140,000 taxpayers to claim over $90 million in tax refunds. The average taxpayer spends approximately $270 filing their taxes every year, according to a news release from Cooper's office. The IRS says its direct file pilot program saved an estimated $5.6 million in tax preparation fees for participating taxpayers.
Direct File is a new IRS service that allows eligible taxpayers to prepare and file their tax return online, for free, including access to help from dedicated IRS customer support representatives. The service is not mandatory for any taxpayer. IRS Direct File works similarly to other tax software that asks taxpayers questions to complete their returns quickly and easily. The service was available in 12 states in 2024, not including either North Carolina or South Carolina.
There are income restrictions for Direct File. Individuals with wages of $200,000 or less were eligible in 2024. If the filer had multiple employers, the threshold dropped to $160,200. Married couples filing separately were eligible if their wages were $125,000 or less.
The IRS Direct File program supports W-2 income, Social Security retirement and unemployment income, as well as several popular tax credits like the earned income tax credit and child tax credit.