IRS expands free Direct File system to all eligible taxpayers in California

IRS expands free Direct File system to all eligible taxpayers in California

California taxpayers can now use IRS Direct File, a free electronic filing service that debuted earlier this year for federal tax returns.

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The IRS’ pilot program launched in January for government workers and was expanded Monday, March 4 to qualifying taxpayers across the state.

The agency said income earners who typically claim a standard deduction are the target users for Direct File.

Direct File should not be confused with the agency’s existing Free File program, which offers commercial software for free to low- and middle-income earners.

Also see: TurboTax maker Intuit barred from advertising ‘free’ tax services without disclosing who’s eligible

Here are some of the nuts and bolts of Direct File:

—Direct File first prompts taxpayers to answer screening questions to determine if they are eligible.

—Examples of eligible filers include those who report income on a W-2. Filers who claim income from other gigs are not eligible.

—Those with income from unemployment compensation, Social Security benefits and income interest less than or equal to $1,500 may also be eligible.

—Taxpayers who are itemizing their deductions rather than taking the standard deduction cannot use Direct File this year.

—Direct File does not prepare state tax returns.

—Filers can use a smartphone, laptop or tablet to file.

—A live-chat function connects taxpayers with a customer service representative.

—There is no income threshold.

Other states that were part of the pilot include Arizona, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.

Staff writer Samantha Gowen, The Associated Press and CNN contributed to this report.