Filing taxes is hard. Here’s how agencies could help make it easier for residents.

The April 15 deadline for filing income tax returns is just around the corner, spurring Americans to dig up tax forms, income documents and tax credit and deduction papers. For residents in nine states, the process this year could be made much simpler with free online tax filing tools. 

Of those nine states, tax agencies in Idaho, Maryland, New Jersey and North Carolina have partnered with the civic tech nonprofit Code for America to develop their own tax filing systems this year. The FileYourStateTaxes tool offers a user-friendly, mobile-first filing system for residents to streamline their state and federal tax return processes. 

The states’ projects build upon the federal Internal Revenue Service’s Direct File pilot program administered in 2024, which offered people in 12 states a free electronic tax filing system to manage their federal tax returns. The tool was made permanent this year and opened in 25 states, although it has been the subject of criticism and its long-term future may be in doubt. 

Low- to moderate-income individuals in particular face several barriers to filing tax returns efficiently, said Courtney O’Reilly, an associate program director for Tax Benefits at Code for America. From finding the correct forms to submit to deciphering bureaucratic language, the complex tax system can lead to errors or even unclaimed benefits as people struggle to navigate the process. 

“Tax filing is not only an obligation [for] workers in the United States, but it is also the source of tax benefits [like] the earned income tax credit or the child tax credit,” said Annelise Grimm, program director for Code for America’s Safety Net initiative. But many people opt out of or aren’t able to complete claims for their tax benefits, Grimm said, because “the process is so difficult.”

To help simplify federal and state income tax returns, the FileYourStateTaxes tool automates part of the state-level portion. Using data from users’ Direct File accounts, the FileYourStateTaxes system prepopulates data like their name, address, income and federal tax return information so that taxpayers can prioritize answering specific questions for their state tax return

“Expecting taxpayers to have standalone state filing where they have to re-enter all of their information [is] where a lot of errors come in and a lot of money is spent on auditing those errors, fixing them, contacting taxpayers and trying to resolve some of those issues,” O’Reilly said. “Connecting [state and federal] tools and utilizing information that flows through the federal return gives states an ability to … improve the accuracy, make a better experience for their taxpayers and reduce the amount of calls they get.”

One way to improve the tax filing experience is to include plain-language language on the tax code to help mitigate any user confusion, O’Reilly said. Filing tools designed first for mobile could also help tax agencies reach more residents. A 2021 survey found, for instance, that more than 40% of U.S. adults with lower incomes do not have a laptop or desktop computer. 

Striking a balance between what’s too little or too much information on a webpage is another critical element to easing the state and federal tax return process, O’Reilly added. Agencies should consider, for instance, including a live-chat function that can provide taxpayers an avenue for asking clarifying questions rather than overwhelming them with data all at once. 

And tax agencies should keep in mind that building the tax return tool is one thing, but getting residents to use it is another, O’Reilly said. She pointed to the Idaho State Tax Commission, which is overperforming compared to other states when it comes to linking residents with state-level tax return systems. 

“I think it speaks to clear government communication about resources that are available,” O’Reailly said. The website for the Idaho State Tax Commission, for instance, includes a banner at the top of the webpage directing users to access the federal and state tax filing tools and learn more about it. 

Last year, Arizona, Massachusetts and New York built their own tax filing solutions to integrate with the federal Direct File system. In Arizona and New York, 90% of people who used Direct File for their federal taxes continued using the FileYourStateTaxes system too. And data shows that 88% of tax filers completed and submitted their state return within 15 minutes. 

The research suggests that more states are looking to develop or improve their tax filing resources. And ultimately, a tax filing experience “that feels dignified and good to people” helps “build trust with government and helps ensure that [residents] access the benefits they’re entitled to,” Grimm said. “The user experience is just so incredibly important to them completing the process,” she added.