NJ Residents Gain Free Tax Filing Option in 2025

Governor Murphy and U.S. Department of Treasury Announce New Jersey will Join IRS Direct File.Photo byMorristown Minute

Residents Eligible for Free Tax Filing Option Starting in 2025

TRENTON – July 24, 2024: Governor Phil Murphy and U.S. Department of the Treasury Deputy Secretary Wally Adeyemo have announced that beginning in Filing Season 2025, New Jersey residents will be able to use Direct File to submit their federal tax returns. More than 1.3 million New Jerseyans will be eligible to use this free online filing tool next filing season.

“The Direct File tool is revolutionary to our federal tax filing process, and it will make a world of difference for taxpayers in New Jersey and across the country. Every year, when tax season rolls around, people are forced to put on their personal accounting hats. For many this can be a stressful—and expensive—time,” said Governor Phil Murphy. “By cutting costly, for-profit tax filing software out of the equation with the free Direct File tool, we are saving individuals and families in our state time and money."

Following a successful pilot during the 2024 Filing Season, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) are making Direct File a permanent, free tax filing option available to all 50 states and the District of Columbia, starting in Filing Season 2025. During the pilot in 12 states, Direct File enabled 140,000 taxpayers to claim more than $90 million in refunds, saving an estimated $5.6 billion in filing costs.

“Direct File will provide New Jersey taxpayers with an innovative new, free, and efficient tax filing option,” said New Jersey State Treasurer Elizabeth Muoio.

Direct File provides taxpayers with a streamlined, free avenue to file their federal tax returns online, eliminating the fees associated with major tax software companies. This initiative is supported by the Inflation Reduction Act, designed to make tax filing easier and more affordable for Americans.

User feedback from the pilot program was overwhelmingly positive. In a GSA Touchpoints survey of over 11,000 Direct File users, 90 percent rated their experience as “Excellent” or “Above Average.” The survey also revealed that a majority of users had previously paid to prepare their taxes, with 47 percent having paid to file last year and 16 percent not filing at all the previous year.

"Many low- and moderate-income families depend on federal and state tax refunds to help pay for their expenses, save for emergencies, or even pay down debt," said Maura Collinsgru, Director of Policy and Advocacy for New Jersey Citizen Action. "Direct File gives New Jerseyans another free option to obtain timely tax returns."

New Jersey residents can look forward to this new, cost-free option for their federal tax filings starting in 2025, ensuring a more accessible and efficient tax filing process.

"Free, easy-to-use tax filing will save New Jersey families time and money while getting them the tax credits and benefits they deserve," said Peter Chen, Senior Policy Analyst at New Jersey Policy Perspective (NJPP). "National research has shown that for every dollar spent on Direct File, tax filers receive $106 in tax credits. When this program is fully rolled out, even more families will receive the Child Tax Credit and Earned Income Tax Credit, keeping New Jersey affordable and the best place to raise a family in the country."

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