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Free File Tax Program Remains Woefully Underused
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do not influence our editors’ opinions or ratingsFree File Tax Program Remains Woefully Underused
Only 2% of federal income tax returns were filed through Free File, despite 70% of filers qualifying.
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Economist & Spokesperson
19 years of experience Expertise Economics Data analysis Personal financeAs NerdWallet’s Senior Economist, Elizabeth Renter spends her time analyzing economic trends and data to help people make more informed decisions about their personal finances. Her work has been cited by The New York Times, The Washington Post, the "Today" show, CNBC and elsewhere. Prior to joining NerdWallet in 2014, she was a freelance journalist. She received a Masters of Science in Finance and Economics from West Texas A&M University, and focused her elective coursework on macroeconomics and analytics. When she’s not at work, Elizabeth enjoys college football, old houses, traveling to old cities and powerlifting. She is based in Durham, North Carolina.
As NerdWallet’s Senior Economist, Elizabeth Renter spends her time analyzing economic trends and data to help people make more informed decisions about their personal finances. Her work has been cited by The New York Times, The Washington Post, the "Today" show, CNBC and elsewhere. Prior to joining NerdWallet in 2014, she was a freelance journalist. She received a Masters of Science in Finance and Economics from West Texas A&M University, and focused her elective coursework on macroeconomics and analytics. When she’s not at work, Elizabeth enjoys college football, old houses, traveling to old cities and powerlifting. She is based in Durham, North Carolina. Published in Economist & Spokesperson + more + more
Editor & Content Strategist
Expertise Taxes InvestingSabrina Parys is an editor and content strategist on the taxes and investing team at NerdWallet, where she manages and writes content on personal income taxes. Her previous experience includes five years as a copy editor and associate editor in academic and educational publishing. She is based in Brooklyn, New York.
Sabrina Parys is an editor and content strategist on the taxes and investing team at NerdWallet, where she manages and writes content on personal income taxes. Her previous experience includes five years as a copy editor and associate editor in academic and educational publishing. She is based in Brooklyn, New York. Published in Editor & Content Strategist + more + moreFiling your income tax return can be, for many, a dreaded annual task. And paying to file unnecessarily can only add insult to injury. Still, many eligible filers fail to take advantage of a free federal tax filing program, potentially overspending on filing fees every year to do something that’s required by law.
Filing your income tax return can be, for many, a dreaded annual task. And paying to file unnecessarily can only add insult to injury. Still, many eligible filers fail to take advantage of a free federal tax filing program, potentially overspending on filing fees every year to do something that’s required by law.The Free File program — a partnership between the IRS and Free File Alliance — has been around for 23 years, plenty of time for the general public to be aware of its existence. Yet in 2024, the most recent year with available data, only 2% of federal returns were filed through Free File, even though 70% of filers qualified for the service, according to NerdWallet analysis of IRS data.
The Free File program — a partnership between the IRS and Free File Alliance — has been around for 23 years, plenty of time for the general public to be aware of its existence. Yet in 2024, the most recent year with available data, only 2% of federal returns were filed through Free File, even though 70% of filers qualified for the service, according to NerdWallet analysis of IRS data.102 Million Eligible Filers Didn’t Use Free File
102 Million Eligible Filers Didn’t Use Free FileEach year, the income qualifications for Free File are adjusted to ensure that at least seven in 10 individual income tax filers are able to use the program. (For this filing season, those who had a 2025 adjusted gross income of $89,000 or less qualify.) Even so, a mere fraction of this share uses the tool each year.
Each year, the income qualifications for Free File are adjusted to ensure that at least seven in 10 individual income tax filers are able to use the program. (For this filing season, those who had a 2025 adjusted gross income of $89,000 or less qualify.) Even so, a mere fraction of this share uses the tool each year.In 2024, 2% filed using Free File — slightly less than the 10-year average of 2.2%. The remaining 102 million qualified filers may have overpaid to file their returns.
In 2024, 2% filed using Free File — slightly less than the 10-year average of 2.2%. The remaining 102 million qualified filers may have overpaid to file their returns.Some tax software providers — such as TurboTax and H&R Block — offer free versions of their online software, but many aren’t part of the Free File program and therefore don’t operate under the same rules. They may offer costly upgrades and have additional eligibility requirements. Still, an estimated 26.7 million federal income tax returns were filed on such commercial tax websites for free in 2024 outside of the Free File system, according to the American Coalition for Taxpayer Rights. That’s a lot more than the number who used Free File that year, but still a far cry from the more than 100 million who would have qualified under the federal no-cost program.
Some tax software providers — such as TurboTax and H&R Block — offer free versions of their online software, but many aren’t part of the Free File program and therefore don’t operate under the same rules. They may offer costly upgrades and have additional eligibility requirements. Still, an estimated 26.7 million federal income tax returns were filed on such commercial tax websites for free in 2024 outside of the Free File system, according to the American Coalition for Taxpayer Rights. That’s a lot more than the number who used Free File that year, but still a far cry from the more than 100 million who would have qualified under the federal no-cost program.These large software companies also have marketing budgets that make them more ubiquitous than the Free File options, which is one reason the IRS program may go underutilized.
These large software companies also have marketing budgets that make them more ubiquitous than the Free File options, which is one reason the IRS program may go underutilized.Direct File: One less free option in 2026
Direct File: One less free option in 2026Direct File, a service that allowed taxpayers to file directly with the federal government at no cost, was dissolved after the 2025 filing year. The program was available for just two years, only in some states at first and accounted for fewer than 300,000 federal income tax returns filed and accepted in the first part of 2025, according to the IRS.
Direct File, a service that allowed taxpayers to file directly with the federal government at no cost, was dissolved after the 2025 filing year. The program was available for just two years, only in some states at first and accounted for fewer than 300,000 federal income tax returns filed and accepted in the first part of 2025, according to the IRS.How to File For Free
How to File For FreeThis tax season, individual federal filers who meet the income requirement can access Free File software from the IRS website. There, users will answer a few questions before being directed to a compatible software provider. Accessing these providers directly from the IRS website ensures the page you land on is one managed by the program.
This tax season, individual federal filers who meet the income requirement can access Free File software from the IRS website . There, users will answer a few questions before being directed to a compatible software provider. Accessing these providers directly from the IRS website ensures the page you land on is one managed by the program.Federal taxpayers who prefer an analog approach can opt to use another option: IRS free fillable forms. This route is most similar to filing paper returns and lacks the hand-holding guidance of tax software.
Federal taxpayers who prefer an analog approach can opt to use another option: IRS free fillable forms . This route is most similar to filing paper returns and lacks the hand-holding guidance of tax software.Volunteer Income Tax Assistance (VITA) is another free IRS program generally open to people earning $69,000 or less, those with disabilities or people with limited English proficiency. VITA provides free, in-person tax preparation across the U.S. A similar program, Tax Counseling for the Elderly, specializes in assisting taxpayers age 60 and older.
Volunteer Income Tax Assistance (VITA) is another free IRS program generally open to people earning $69,000 or less, those with disabilities or people with limited English proficiency. VITA provides free, in-person tax preparation across the U.S. A similar program, Tax Counseling for the Elderly, specializes in assisting taxpayers age 60 and older.If you don’t qualify for Free File — either because you earn too much or have a complicated tax situation — you may end up working with a commercial tax software. But taxpayers who use these tools should be vigilant about paid upgrades to ensure they're only choosing add-ons that match their specific tax needs.
If you don’t qualify for Free File — either because you earn too much or have a complicated tax situation — you may end up working with a commercial tax software. But taxpayers who use these tools should be vigilant about paid upgrades to ensure they're only choosing add-ons that match their specific tax needs. About the author Elizabeth Renter Elizabeth Renter Elizabeth Renter's work as NerdWallet’s Senior Economist has been cited by The New York Times, The Washington Post, CNBC and elsewhere. See full bio.Helpful resources
Helpful resources How Federal Tax Brackets and Rates Work Capital Gains Tax: Long and Short-Term Rates for 2025-2026 How to Fill Out Your W-4 Form and When to Adjust It More like this Taxes 2026 Tax Brackets and Federal Income Tax Rates The IRS adjusts the federal tax brackets annually to keep pace with inflation. The 2026 tax brackets apply to taxes filed in 2027. Bella Avila Standard Deduction for 2025 and 2026: Amounts, When to Take The standard deduction is a popular way for taxpayers to reduce their taxable income. Your deduction amount depends on your age, filing status and other factors. 2 By Sabrina Parys, Tina Orem Capital Gains Tax: Long and Short-Term Rates for 2025-2026 Capital gains are the profits from the sale of assets. They can be subject to short-term or long-term tax rates. 2 By Sabrina Parys, Tina Orem 25 Popular Tax Deductions and Tax Breaks for 2025-2026 A deduction cuts the income you're taxed on, which can mean a lower bill. A credit cuts your tax bill directly. Learn more about common tax breaks and write-offs — and how to claim them. 2 By Sabrina Parys, Tina Orem Federal Income Tax Calculator and Refund Estimator 2025-2026 Estimate your 2026 tax refund or bill using our free income tax calculator. Enter your income, age and filing status to get started. Sabrina Parys How Federal Tax Brackets and Rates Work Contrary to popular belief, your income isn't taxed at just one rate. The U.S. has a progressive tax system, meaning different portions of your income get taxed at different rates. 2 By Sabrina Parys, Tina Orem 2025 Tax Brackets and Federal Income Tax Rates The 2025 federal income tax rates range from 10% to 37% and apply to taxes due by April of this year. Find out which bracket you're in. Bella Avila 2026 Tax Brackets and Federal Income Tax Rates The IRS adjusts the federal tax brackets annually to keep pace with inflation. The 2026 tax brackets apply to taxes filed in 2027. Bella Avila Standard Deduction for 2025 and 2026: Amounts, When to Take The standard deduction is a popular way for taxpayers to reduce their taxable income. Your deduction amount depends on your age, filing status and other factors. 2 By Sabrina Parys, Tina Orem Capital Gains Tax: Long and Short-Term Rates for 2025-2026 Capital gains are the profits from the sale of assets. They can be subject to short-term or long-term tax rates. 2 By Sabrina Parys, Tina Orem 25 Popular Tax Deductions and Tax Breaks for 2025-2026 A deduction cuts the income you're taxed on, which can mean a lower bill. A credit cuts your tax bill directly. Learn more about common tax breaks and write-offs — and how to claim them. 2 By Sabrina Parys, Tina Orem Federal Income Tax Calculator and Refund Estimator 2025-2026 Estimate your 2026 tax refund or bill using our free income tax calculator. Enter your income, age and filing status to get started. Sabrina Parys How Federal Tax Brackets and Rates Work Contrary to popular belief, your income isn't taxed at just one rate. The U.S. has a progressive tax system, meaning different portions of your income get taxed at different rates. 2 By Sabrina Parys, Tina Orem 2025 Tax Brackets and Federal Income Tax Rates The 2025 federal income tax rates range from 10% to 37% and apply to taxes due by April of this year. Find out which bracket you're in. Bella Avila 2026 Tax Brackets and Federal Income Tax Rates The IRS adjusts the federal tax brackets annually to keep pace with inflation. The 2026 tax brackets apply to taxes filed in 2027. Bella Avila Standard Deduction for 2025 and 2026: Amounts, When to Take The standard deduction is a popular way for taxpayers to reduce their taxable income. Your deduction amount depends on your age, filing status and other factors. 2 By Sabrina Parys, Tina Orem Capital Gains Tax: Long and Short-Term Rates for 2025-2026 Capital gains are the profits from the sale of assets. They can be subject to short-term or long-term tax rates. 2 By Sabrina Parys, Tina Orem 25 Popular Tax Deductions and Tax Breaks for 2025-2026 A deduction cuts the income you're taxed on, which can mean a lower bill. A credit cuts your tax bill directly. Learn more about common tax breaks and write-offs — and how to claim them. 2 By Sabrina Parys, Tina Orem