Direct File

Direct File is a guided tax filing service for residents with simple tax situations to file directly with the government for free. Piloted by the IRS for the 2024 filing season, IRS Direct File helps taxpayers do their federal taxes and integrates with states’ solutions for state taxes. New Jersey was one of 25 states to support Direct File in 2025, and one of the first to build on Code for America’s FileYourStateTaxes tool for an integrated, secure, and seamless experience for residents filing federal and state taxes.

Challenge

The IRS estimates that individual taxpayers carry a burden of about $160 - and several hours - preparing their returns. Through Direct File, New Jersey aimed to stand up a free, secure, user-friendly option that allows many residents to file both their federal and state taxes with one tool.
Innovation In Action

OOI set up a unique partnership with Code for America, a civic tech nonprofit, to build on its FileYourStateTaxes tool. The team was able to break down New Jersey’s complex tax codes into just a few simple questions while leveraging the tool’s account management capabilities, design system, and API integration to transfer federal return data from the IRS. OOI worked with tax experts at the New Jersey Division of Taxation and the United Way of Greater Newark’s free tax assistance program to understand regulatory requirements and define the scope of the product. Importantly, the team also worked with residents themselves to co-design and continually improve the user experience.

Impact + Metrics

As of April 2025, about 8,500 New Jersey residents filed both a federal and a state tax return in a single online process using Direct File (roughly totaling about $1.3 million in cost savings for filers).
$3.2 million in refunds were disbursed through New Jersey Direct File.
Due to the benefit of prepopulated household and income data coming from the federal return, users spent only about 10 minutes completing the New Jersey-specific questions in order to file their state return.
Eligible users automatically claimed tax breaks like the Earned Income Tax Credit, Child Tax Credit, and Child and Dependent Care Credit.
As of April 2025, 97% of users surveyed have said they were “satisfied” or “very satisfied” with their filing experience and 92% prefer Direct File to their previous filing method. 94% thought that the data transfer from federal to state was “seamless and quick.”
Nine out of 10 users would recommend Direct File to friends and family.

Status

Direct File launched in New Jersey in January 2025 and was expanded to include retirement income filers in March 2025. The tax season ended April 15, and the tool remains open for the extended filing season.

Resources and Additional Information

Key Partners

NJ State Department of Treasury
Code for America

Last updated on 4/22/25