Filing your income tax return can feel like a daunting task for many people, especially when having to pay unnecessary fees on top of it. Despite this, a significant number of eligible filers do not take advantage of the Free File program for federal tax filing, potentially overspending on filing fees each year for a mandatory task.
The Free File program, a collaboration between the IRS and Free File Alliance, has been in existence for 23 years, giving the general public plenty of time to be aware of its availability. However, in 2024, only 2% of federal returns were filed through Free File, despite 70% of filers being eligible for the service, based on BW’s analysis of IRS data.
102 Million Eligible Filers Didn’t Use Free File
Every year, the income qualifications for Free File are adjusted to ensure that at least seven out of 10 individual income tax filers can utilize the program. (For this tax season, those with a 2025 adjusted gross income of $89,000 or less are eligible.) Nevertheless, only a small percentage of eligible individuals utilize this resource annually.
In 2024, 2% of filers used Free File, slightly below the 10-year average of 2.2%. The remaining 102 million qualified filers may have paid more than necessary to file their returns.
Some tax software providers, like TurboTax and H&R Block, offer free versions of their online software, but many are not part of the Free File program and may have costly upgrades and additional eligibility requirements. Despite this, an estimated 26.7 million federal income tax returns were filed for free on commercial tax websites in 2024 outside of the Free File system, according to the American Coalition for Taxpayer Rights. This number exceeds the usage of Free File that year, but still falls short of the over 100 million who could have qualified under the federal no-cost program.
These major software companies have extensive marketing budgets that make them more visible than the Free File options, which may explain why the IRS program is underutilized.
Direct File: One less free option in 2026
Direct File, a service that allowed taxpayers to file directly with the federal government at no cost, was discontinued after the 2025 filing year. The program was initially available in select states for only two years and accounted for fewer than 300,000 federal income tax returns filed and accepted in early 2025, as per the IRS.
How to File For Free
During this tax season, individual federal filers who meet the income requirement can access Free File software from the IRS website. By answering a few questions on the site, users will be directed to a compatible software provider. Accessing these providers through the IRS website ensures that the page is managed by the program.
Federal taxpayers who prefer a more traditional approach can choose another option: IRS free fillable forms. This method is similar to paper filing and lacks the guidance provided by tax software.
Volunteer Income Tax Assistance (VITA) is another free IRS program available to individuals earning $69,000 or less, those with disabilities, or those with limited English proficiency. VITA offers free, in-person tax preparation across the U.S. Another program, Tax Counseling for the Elderly, specializes in assisting taxpayers aged 60 and above.
If you do not qualify for Free File due to income or tax complexity, you may end up using commercial tax software. In such cases, taxpayers should be cautious about paid upgrades and select only those that align with their specific tax requirements.