The Direct File Act of 2026 establishes a government-run online tax preparation and filing program that allows individual taxpayers to prepare and file federal income tax returns for free directly through the IRS. The program, which must be user-friendly, mobile-accessible, and available in multiple languages, will use IRS data to pre-fill tax information when possible and feature a question-based interview system to simplify the filing process. Starting in 2028, at least 50 percent of taxpayers in participating states will be eligible to use the program, with the IRS required to expand eligibility to the maximum extent possible and report annually to Congress on usage and satisfaction. The bill also voids any existing agreements that restrict the government's ability to provide tax preparation services and prohibits the IRS from entering into new such agreements. Additionally, the legislation allows states that participate to integrate their own state income tax filing into the federal system and provides participating states up to $1 million in grants to develop compatible state filing functionality. Congress has authorized funding for the program through fiscal year 2035.
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