Starting in the 2025 tax season, Maine residents will be able to file their federal taxes online for free.

The Internal Revenue Service (IRS) has launched a pilot project Direct file system that enabled free online filing last tax season, and although Maine was not among the 12 states that piloted the program, State officials confirmed that Maine will opt for this the system as soon as it is available in all states and Washington DC

Direct File, which the IRS received funding to develop through the Inflation Reduction Act, is currently limited to taxpayers with the most common tax situations.

Maine residents must file their state tax returns separately, but Maine Revenue Services has allowed residents to File a federal income tax return free online since 2001, said Anya Trundy, director of legislative and strategic operations for the Maine Department of Administrative and Financial Services.

Maine Revenue Services conducted a Tax portal last tax season to replace an older system for individuals to file their income tax returns. The state is also working with the IRS to fully integrate Direct File and the new Maine Tax Portal, with a goal of completing the integration by 2026, Trundy said.

“This will allow taxpayers to have their information automatically transferred from their completed federal tax return to begin their Maine tax return,” Trundy said.

In the meantime, Trundy said, Direct File is expected to save Maine residents tax filing fees and help them claim the federal tax credits they are eligible for.

According to a report out of Under the Economic Security Project, Direct File could generate a total value of $79.9 million to Maine taxpayers, including filing fees, time spent filing, and additional claimed federal tax credits.

During the pilot program issued more than $90 million in tax refunds and $35 million in outstanding tax debt. In total, the U.S. Treasury Department estimated that Direct File users saved $5.6 million in tax preparation fees.

Maura Pillsbury, a state and local tax policy analyst at the progressive Maine Center on Economic Policy, who previously accessed on Governor Janet Mills’ administration praised the decision to join Direct File.

“This is a major win for tax fairness and will save Maine residents tens of millions of dollars in tax penalties and unclaimed tax credits,” Pillsbury wrote in a statement. “Direct File will enable Maine taxpayers to receive the refunds they deserve and make filing their taxes much easier.”

In a July blog post, Pillsbury pointed out Data This shows that less than 3% of taxpayers file their tax returns for free, although an estimated 70% are eligible to do so. Pillsbury also cited Results that the for-profit tax preparation industry exploits the most vulnerable taxpayers, particularly low-income earners and black and brown populations.

Direct File is not a replacement for According to the IRS, these are tax professionals or commercial software providers.