The federal government permanently shut down a pilot program that let some taxpayers file their returns for free. How many Idahoans, briefly, had access to the service?
A dozen states first piloted the Biden era program in 2024. In its second year, Idaho joined in and was among 25 states to offer Direct File to qualifying taxpayers.
The Idaho Tax Commission reports they received 2,117 returns through the program in 2025, and estimates about 210,000 Idahoans qualified to use the free service.
After its first year, the IRS said Direct File was a success. It was developed to broaden the scope of free options available to taxpayers but it faced push back from private tax companies and Republican lawmakers. In a hearing last year, Sen. Mike Crapo (R-Idaho) called it inefficient.
The Trump administration argued Free File, a public-private partnership, was a better alternative. Free File has been administered by online tax preparation companies for decades and is available to some taxpayers with income restrictions.
Kathy Hurley, who heads Boise State University’s Volunteer Income Tax Assistance program. said Direct File was developed by the federal government to offer more options to taxpayers.
“Direct file was an opportunity for people with basic, simple tax returns to file their tax returns, both federal and state, for free,” she said. “It had its limits because it truly was designed for someone with a few W-2s, not a complex tax situation.”
“A lot of the free file programs that you can access through the IRS website and elsewhere, they are free to file your federal return only. And then you get charged to file your state return. And so that's one of the downsides of the other free file programs,” she added.
Hurley said she was surprised to hear the Trump administration had called it a "failed" program as it had just started getting off the ground.
“I believe it was still on the uptake,” she said, adding Direct File suffered from most taxpayers simply being unaware it existed.
Hurley compared the cancellation to developing a new medical drug, finding out it worked but stopping its production because people didn’t know it was available.
“I don't feel like it was given a chance,” she said. “A lot of money was sunk into developing this and to drop it, suddenly, for whatever reason, just doesn't make even a business sense.”
