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IRS successfully launches their own free Direct File - some of my fellow 'murcans are eligible
(sh.itjust.works)
For your simple[r] tax needs: https://directfile.irs.gov
Which is funny considering this is only for federal and not state taxes. Do they say why it’s limited to specific states?
Most of the listed states do not have state level income taxes. The only exceptions are Arizona and California. The rest of the states have no state level income tax. Alaska is the only state without a state level income tax that isn't included in this IRS scheme.
I imagine there is a reason all but two of the chosen states lack a state level income tax.
Massachusetts does. Per the IRS site, the tool won't help file it, but will lead you to another tool that does.
State taxes are probably an additional complication in the calculations that hasn’t been implemented yet for all states. And for those without a state income tax not covered, probably some other state-tax-adjacent thing
It's a trial program, to work out the major kinks, issues, and problems before rolling it out further to other states.
It's also federal-only, meaning you still have to do your state returns. Most of the states in the trial have no state income tax, which makes it an ideal solution for taxpayers in those states.
Expect it to expand to all 50 states in the coming years, presuming Republicans don't somehow manage to legislate it into oblivion like usual.
If they have no state level income tax how do the states get money for things? Do they just tax businesses?
Sales tax, property tax, lottery also