Accounting
North Carolina joins IRS Direct File
The Treasury Department and the Internal Revenue Service announced that North Carolina will be the latest state to join the IRS Direct File free tax program in filing season 2025.
The free online filing system was pilot tested last tax season in 12 states, and the IRS
The Treasury and the IRS have been working with interested states to offer Direct File to their taxpayers with North Carolina being the latest state to join, following Oregon, New Jersey, Pennsylvania, New Mexico and Connecticut. At least 1.25 million North Carolinians will be eligible to use the free online filing tool next filing season.
Natalia Bratslavsky/Adobe
“Direct File will save North Carolinians time and money and help ensure they receive the tax benefits they are owed,” said Treasury Secretary Janet Yellen in a statement Friday. “After a successful pilot this filing season, we are pleased to expand the program as a permanent offering and welcome North Carolina as the latest new state to offer this free option to taxpayers.”
“Filing taxes is often stressful, expensive, and time-consuming for North Carolina taxpayers and families,” said North Carolina Governor Roy Cooper in a statement. “The IRS Direct File tool helps remove unnecessary hurdles and fees by allowing taxpayers to file directly with the IRS for free, keeping more money in their pockets. This resource will help ensure qualifying families receive tax credits. We are grateful to the United States Department of Treasury and Internal Revenue Service for developing this tool and making it available as a no-cost option for North Carolinians for filing season 2025.”
However, Cooper, a Democrat, is term limited and won’t be leading the state next tax season. If he is succeeded next year by a Republican, the program could be curtailed.
Taxpayers have an extra day, until Friday, Jan. 10, to file any return or pay tax originally due on Thursday, Jan. 9.
The IRS granted the time for the Jan. 9 National Day of Mourning for Jimmy Carter, the 39th U.S. president. He was the longest-lived president in history, dying December 29 at the age of 100.
The one-day extension also applies to any federal income, payroll or excise tax deposit due on Jan. 9, including those required to be made through the Treasury Department’s Electronic Federal Tax Payment System.
IRS Free File Guided Tax Software will be available this Friday for taxpayers ahead of the start of tax season later this month.
Starting Jan. 10, IRS Free File will begin accepting individual returns. Providers will generally allow taxpayers to prepare and file returns now and hold them for e-filing when the season starts.
Taxpayers can access free software tools at
“Taxpayers have multiple filing choices,” said IRS Commissioner Danny Werfel, in a statement, “including trusted tax professionals, tax software, Free File, Direct File or free preparation services through IRS partners.”
IRS Free File is entering its 23rd filing season and is delivered through a partnership between the IRS and Free File Inc. (formerly the Free File Alliance). Eight private-sector partners will provide online guided tax software products for taxpayers with an adjusted gross income of $84,000 or less in 2024. Taxpayers with an AGI above $84,000 can use the Free File Fillable Forms starting Jan. 27.
For 2025, the partners participating in IRS Free File are 1040Now, Drake (1040.com), ezTaxReturn.com (also in Spanish), FileYourTaxes.com, On-Line Taxes,TaxAct, TaxHawk (FreeTaxUSA) and TaxSlayer.
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Local governments and municipalities have been
In the Tax Foundation’s
The most competitive states are ranked from one to 10 according to their scores, one being the most competitive within the group and 10 being the least. For the states at the tail end of the spectrum, which are the least competitive in terms of sales and excise taxes, rankings are from 50 for the least competitive to 40 for the state with the highest comparative score.
Read on to see which states were the most — and least — competitive when it comes to these tax areas.
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