Oregon resident taxpayers preparing their own tax returns in 2025 will have the option to electronically file both their federal and state income tax returns using the combination of IRS Direct File and Direct File Oregon, the IRS and the Oregon Department of Revenue announced on October 3.
“The Direct File Program is a game-changer for taxpayers,” Governor Tina Kotek said. “This free filing option is an equitable opportunity to save Oregonians time and money, regardless of their income.”
The IRS and US Treasury Department announced an expansion of the types of returns that can be filed using IRS Direct File beyond what was available in the pilot program during the 2024 tax filing season.
During the pilot last year, IRS Direct File covered limited tax situations, including wage income reported on a W-2 form, Social Security income, unemployment compensation and certain credits and deductions. For the 2025 filing season, IRS Direct File will support Forms 1099 for interest income greater than $1,500, retirement income and the Form 1099 for Alaska residents reporting the Alaska Permanent Fund dividend. (See the attached graphic for more on who will be able to use IRS Direct File in 2025.)
In the 2024 tax season, more than 140,000 taxpayers in 12 states filed their federal tax returns using the limited pilot program while nearly 7,000 Oregon taxpayers filed their state returns using the free, state-only Direct File Oregon option.
The IRS estimates that 30 million U.S. taxpayers will be able to use IRS Direct File in 2025, including 640,000 Oregon taxpayers who will be able to e-file both their federal and state returns for free.
The U.S. Department of the Treasury announced in May that it would make IRS Direct File a permanent option for taxpayers and invited all 50 states to participate to create a seamless free filing system for both federal and state taxes. Oregon was the first of 12 new states to accept the invitation from the IRS in June.
“Connecting Direct File Oregon with the IRS Direct File option beginning next year will give Oregon taxpayers a seamless way to electronically file both their federal and state income tax returns—and do both for free,” Oregon Department of Revenue Director Betsy Imholt said.
Downloadable the IRS_Direct_File_Eligibility_2_(4).pdf.
