Direct File Act of 2026

Summary#

This bill, the "Direct File Act of 2026," would add a new section to the tax code to create a federal online program that lets taxpayers prepare and file individual income tax returns for free. The program must be owned by the federal government and can use IRS records to prefill return information when a taxpayer agrees. It must use interview-style questions, plain language, multiple languages, mobile access, meet accessibility rules (section 508), appear prominently on the IRS website, be promoted through mass media, offer integrated customer support including live chat, and allow filing even when a taxpayer is not required to file. The bill also bars the Treasury Secretary from entering agreements that limit the Secretary's right to provide tax preparation or filing services and voids any such existing agreements 30 days after enactment. It requires annual reports to Congress starting August 31, 2027, and forbids charging taxpayers fees to use the program. The bill includes provisions to allow state or local income tax filing in "participating States" and creates a grant program that can provide $1,000,000 to a participating State that meets criteria set by the Secretary. The bill also amends deadlines for certain electronically filed information returns. The program would apply to returns for taxable years beginning after December 31, 2025.

What it means for you#

• If this becomes law, taxpayers could have a free, government-run online option to prepare and file individual income tax returns.
• The system could prefill parts of returns using IRS records if you agree.
• The service must work on mobile devices, be available in multiple languages, and meet accessibility standards.
• Customer support, including live chat, would be part of the program.
• In states that choose to participate or that have no state income tax, the system may let you file state or local returns together with your federal return.
• Taxpayers stay fully responsible for the accuracy of their own returns.
• Existing agreements that limit the Treasury Secretary from offering these services would be void 30 days after enactment.

Expenses#

• The bill authorizes the appropriation of "such sums as may be necessary" to carry out the program for fiscal years 2026 through 2035.
• The bill establishes a grant program and specifies that a participating State may be eligible to receive $1,000,000 under that program if it meets criteria the Secretary sets.
• No publicly available information about total cost estimates, budgetary impact numbers, or projected savings is included in the bill text or provided metadata.

Proponents' View#

No publicly available information.

Opponents' View#

No publicly available information.