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Why Delaware is not a part of free IRS Direct File program yet


Why Delaware is not a part of free IRS Direct File program yet

A new parent? Recently married? There are a lot of different factors when filing your taxes. Here's what to know so you're best prepared this season.

Delaware is not yet a part of the IRS Direct File program, but the state and the federal government have had discussions about the state's "eventual" participation.

Last month, the IRS announced 12 new states to join the Direct File program, which is a free, web-based system accessible on all platforms that walks taxpayers step-by-step through their tax returns. It also guides taxpayers through their state's filing process.

All of Delaware's neighbors, including Maryland, Pennsylvania, and New Jersey, have joined the program for 2025. The Delaware Department of Revenue said it has discussed the First State's eventual participation in the program with the U.S. Treasury. Over 30 million taxpayers in 24 states nationwide have access to the service.

The state department said it is looking for support similar to what other states have received in order to fully and seamlessly integrate the IRS system with the state's free filing system. The majority of Delaware residents would be able to file both their federal and state taxes with the Direct File system, and the department said it wants to ensure residents' ability to use one service instead of separate filing through the state's systems or third-party vendor.

A tech nonprofit called Code for America is working with the U.S. Treasury to help implement Direct File, but it does not have enough resources for every state yet.

Without assistance from Code for America, Delaware would have to find its own financial resources to implement the program as intended. The nonprofit said it is working with New Jersey in October, allowing the state to join Direct File.

In a Bloomberg report earlier this year, the Deputy Director of Revenue Jamie Johnstone said the state is working to get a better understanding of the program's results after its 2024 pilot program.

The expansion of Direct File in 2025 will also cover taxpayers claiming a Child and Dependent Care Credit, Premium Tax Credit, Credit for the Elderly and Disabled, and Retirement Savings Contribution Credits. It will also cover taxpayers claiming deductions for Health Savings Accounts.

The state offers free filing for Delaware Personal Income Tax Returns and is free and unlimited to all Delaware taxpayers, the state department said.

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