The Direct File Act of 2026 creates a free, government-run online tax filing system that lets people prepare and file their federal income tax returns directly through the IRS website. Instead of paying private tax preparation companies, eligible taxpayers can use this new IRS tool at no cost. The system will automatically pull information the IRS already has about you—like income from employers or banks—and fill it into your return, making filing simpler and faster. You'll answer questions in plain language through an interview-style process, and the system will work on phones and tablets. The IRS will promote this program heavily through TV, radio, and social media to make sure people know about it.

The bill also prevents the IRS from signing any new agreements with private tax companies that would stop the government from offering this free service. Any existing agreements that restrict the IRS's ability to provide free filing will be canceled 30 days after this law passes. Starting in 2028, at least half of all taxpayers in states that participate will be eligible to use the program, and the IRS must keep expanding it to reach more people. States that want to can integrate their own state tax filing into this same system, and they'll receive up to $1 million in grants to help set it up. The IRS must report to Congress every year on how many people are using the program, how satisfied they are, and what barriers prevent people from using it.