IRS Direct File offers 24-hour access to new users this week

The federal government's new Direct File tax-filing service is  continuously available to new users starting this week, the IRS said.

The pilot program, which had been opened previously on a limited basis, is meant to be a free public alternative to commercial tax-prep services like Intuit's TurboTax and H&R Block's e-file site. It was created as part of the 2022 Inflation Reduction Act and already has received some criticism from the $33 billion tax prep industry, which asserts the competition is a waste of taxpayer money.

Direct File isn't for everyone. The current version can handle only limited tax situations. Users, for example, must take the standard deduction and report only certain types of income such as W-2 wages, Social Security income and unemployment compensation.

The service is also restricted to those who have incomes less than $200,000 (or $125,000 if you're married and filing separately), and taxpayers can claim as credits only the Earned Income Tax Credit and tax credits for children or other dependents. It also can only file federal returns.

Anyone who is interested in starting their returns with the service should go to directfile.irs.gov for more information.

Direct File opened in phases this year in 12 states, including New York, as developers prepared it for wider use. After weeks of testing, the IRS made it available last month to new users during short time windows, and now Direct File is continuously available, including on weekends.

The system may still briefly close to new taxpayers if it maxes out its pre-set volume limits, though taxpayers who have already started their returns through Direct File will be allowed to continue.

The IRS expects to make Direct File fully open to eligible users in the 12 states starting March 12.