Making Tax Filing Simpler Via Civic Tech 

In 2024, for the first time ever, American taxpayers were able to file their tax returns online directly with the Internal Revenue Service for free. Through the IRS Direct File pilot, filers in 12 states had a free, easy way to e-file their federal returns, and in two of those states — Arizona and New York — they also were able to use FileYourStateTaxes, a tool Code for America built in partnership with those states, to file a state return.

FileYourStateTaxes is a solution to one of the nation’s top challenges in tax filing: state integration. Because the majority of taxpayers in the United States must file a federal return and a state return, simplifying the filing process requires technology that makes it easy for people to do both. FileYourStateTaxes allowed Direct File taxpayers to transfer their federal return data to the state filing tool, eliminating duplicative data entry and creating a single, unified experience.

Code for America has been confident in this effort to simplify tax filing since its inception, and now, reviews from the public — which we’ve published in a new report — confirm its value:

• 96% of taxpayers reported being “satisfied” or “very satisfied” with FileYourStateTaxes.
• 95% said the federal-state data transfer was “smooth and seamless.” 
• 93% said they preferred Direct File over a different method of filing taxes.
• 87% would recommend Direct File and FileYourStateTaxes to friends and family.
• 88% completed a state return in less than 15 minutes. 

In addition to enjoying the convenience of e-filing via Direct File and FileYourStateTaxes, users who previously worried about the cost of filing appreciated having a completely free option. For many, this is a stark difference from the past reality of paying hundreds of dollars to file returns. And for certain low- and middle-income families who may have avoided filing a return altogether in prior years — thus missing out on benefits like the Earned Income Tax Credit and the Child Tax Credit — having access to an easier way to file means having access to cash support that can be a lifeline.

This pilot launch started out as every quality civic tech rollout should: small and limited. But now that there’s proof of its success, Code for America looks forward to sharing our lessons from 2024 with any state looking to join Direct File and to partnering with state tax agencies who are interested in making FileYourStateTaxes available to their residents. Together, we can work toward building a tax filing system that is free, easy, and accessible to all. 

Anthony Silverman is the Senior Program Director for Tax Benefits at Code for America. Anthony has over a decade of experience building and growing initiatives that improve the well-being of communities and the systems meant to support them. Anthony’s most recent work focused on helping improve data products and systems to better guide resources and address disparities amongst youth and families in Washington State, where he served as Senior Administrator for Digital Innovation. His work in the family well-being space started with his Foster America fellowship in Northern Colorado, which piloted a federally funded navigation program that is now expanding to help families across the country. In his spare time, Anthony enjoys teaching youth and adults alike how to surf, rock climb, and play overly complicated board games, many of which he enjoys near his home in beautiful, foggy San Francisco.

Image by motionstock from Pixabay