RegFollower Desk

The Franchise Tax Board (FTB) of California announced that it will continue to work with the IRS to offer many California taxpayers the option of a simple way to file both their federal and state tax returns using the IRS Direct File and California CalFile services.

Both online services offer eligible taxpayers the ability to file their personal income tax returns quickly, safely, and directly with the respective tax agency and claim valuable, cash-back tax credits such as the state and federal Earned Income Tax Credit and California’s Young Child Tax Credit.

FTB launched CalFile nearly 16 years ago. After a successful pilot programme this spring, the IRS recently announced it would make Direct File a permanent option. The IRS said Direct File served 140,000 taxpayers – including more than 33,000 Californians – in 12 partner states this filing season.

With funding recently approved, FTB will begin work to allow Californians who use Direct File to import their federal tax data into CalFile, saving them time and increasing the number of California’s working families that can access the federal and state tax credits that they qualify for. This new feature is expected to be available beginning in January 2026.

For the 2024 tax year, the IRS will continue to provide a link to CalFile for Californians to complete their state tax return – the same as during this spring’s Direct File pilot programme.

The IRS announced on 30 May, 2024, this year that it is exploring ways to expand Direct File to make more taxpayers eligible next year.

If this goes through, California is set to join New Mexico, Pennsylvania, Oregon, and New Jersey for the 2025 filing season.