In 1932, Washington voters approved the first state income tax in the state’s history. A short while later, the state supreme court ruled it unconstitutional. Every April since, voters here have only had to deal with a single tax filing: the federal one. Not even the Seattle City Council's unanimously approved 2017 local income tax made it through the court. 

This year, that sole filing process gets easier—at least for some people. The IRS is rolling out a new program to let Americans in 12 states, including Washington, file directly with them, for free. The pilot program is called, get ready for this, Direct File.

Direct File can’t handle every tax situation. According to the IRS, it works for W-2, social security, and unemployment income, as well as certain basic tax credits and deductions. This limits the potential user base to folks with relatively simple tax returns. Think of it as a software program in beta, rolling out features slowly (in this case, annually). The idea is for the team behind the program to steadily add features, and eventually open it up to everybody. 

The Direct File program was funded as part of the 2022 Inflation Reduction Act. Why did the government decide to create its own version of TurboTax or H&R Block online? Well, the easy answer is because those companies kept lying to consumers about their own “free” tax returns.

Way back in 2003, the IRS started a program called Free File that required online tax prep services to offer their programs at no cost to people below a certain income threshold. But the private companies kept tricking qualifying customers into buying expensive tax preparation services instead.

This is why in 2022, Intuit, the parent company of TurboTax, had to send $3.75 million back to Washingtonians who paid for tax preparation even though they qualified for free filings. It might not also surprise you to learn that tax preparation companies have spent tens of millions lobbying against the creation of the Direct File system. 

If you want to know if you’re eligible for the Direct File program, there’s a handy online tool you can use to find out.