Inside This Issue

1. 2025 IRS Nationwide Tax Forum Opens for Registration
2. Retirees: April 1 is last day to begin obligatory withdrawals from IRAs and 401(k)s
3. April 15 deadline reminder for tax year 2021 returns
4. Tax Time Guide: Avoid penalties and interest; use IRS electronic payment methods for quick, secure service
5. Technical Guidance

1.  2025 IRS Nationwide Tax Forum Opens for Registration

Tax Pros: Registration is now open for the 2025 IRS Nationwide Tax Forum. Register today to ensure your space this summer in one of the five following cities:

• Chicago: July 1 – 3
• New Orleans: Aug. 5 – 7
• Orlando: Aug. 26-28
• Baltimore: Sep 9-11
• San Diego: Sep. 16 – 18

The IRS Nationwide Tax Forum offers continuing education and networking opportunities to Enrolled Agents, Certified Public Accountants, IRS Annual Filing Season Program participants and other tax professionals. Each forum offers more than 40 seminars and workshops on a wide variety of federal and state tax issues presented by experts from the IRS and its partner associations. Attendees may earn up to 18 continuing education credits.

Visit IRS Nationwide Tax Forum for information on the program, including accommodations and registration. 

Back to top

2.  Retirees: April 1 is last day to begin obligatory withdrawals from IRAs and 401(k)s

The IRS reminded retirees that in most cases those who turned 73 in 2024 must start receiving payments from Individual Retirement Arrangements (IRAs), 401(k)s and similar workplace retirement plans by Tuesday, April 1. Usually, Required minimum distributions (RMDs) are paid by the end of the year. Those who reached 73 in 2024, however, were permitted to postpone their first RMD until April 1. This special rule applies to IRA owners and participants born after Dec. 31, 1950.

For more information on RMDs and other changes impacting retirees and retirement plan participants, visit Tax information for seniors & retirees on IRS.gov.

Back to top

3.  April 15 deadline reminder for tax year 2021 returns

Taxpayers have until April 15 to file their 2021 tax returns to claim a refund. The IRS estimates that more than $1 billion in refunds remain unclaimed. Taxpayers typically have three years to file and claim their tax refunds. If they don’t file within three years, the money becomes the property of the U.S. Treasury. After the expiration of the three-year period, the refund statute generally prevents the issuance of a refund check and the application of any credits, including overpayment of estimated taxes or withholding amounts, to other tax years that are underpaid.

Forms and instructions for both current and previous years (including Forms 1040 and 1040-SR for the tax year 2021) can be found on the IRS.gov Forms and Instructions page or by calling toll-free 800-TAX-FORM (800-829-3676).

Back to top

4.  Tax Time Guide: Avoid penalties and interest; use IRS electronic payment methods for quick, secure service

In an effort to provide more resources for taxpayers during this filing season, the IRS encouraged filers to use electronic options on IRS.gov. These online resources can assist filers avoid interest and late filing fees:

• Direct Pay allows taxpayers to securely pay their taxes directly from a checking or savings account without any fees or registration.
• IRS2Go mobile app is the official mobile app of the IRS. Taxpayers can check their refund status, make a payment, find free tax preparation assistance, sign up for tax tips and more.
• Electronic funds withdrawal (EFW) allows taxpayers to file and pay electronically from a bank account when using tax preparation software or a tax professional.
• Electronic Federal Tax Payment System gives taxpayers a safe, convenient way to pay individual and business taxes by phone or online. To enroll and for more information, call 800-555-4477 or visit eftps.gov.
• Debit or credit card and digital wallet lets individuals pay online, by phone or with a mobile device through any IRS authorized payment processor.

This announcement is part of the Tax Time Guide, a resource to help taxpayers file an accurate tax return. Further information and help are available in Publication 17, Your Federal Income Tax.

Back to top

5.  Technical Guidance

Notice 2025-17 sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for February 2025 used under section 417(e)(3)(D), the 24-month average segment rates applicable for March 2025, and the 30-year Treasury rates, as reflected by the application of section 430(h)(2)(C)(iv).

WASHINGTON — The Internal Revenue Service announced today tax relief for individuals and businesses in parts of West Virginia affected by severe storms, straight-line winds, flooding, landslides and mudslides that began on Feb. 15, 2025. 

These taxpayers now have until Nov. 3, 2025, to file various federal individual and business tax returns and make tax payments. 

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Currently, individuals and households that reside or have a business in Logan, McDowell, Mercer, Mingo, Wayne and Wyoming counties qualify for tax relief. 

The same relief will be available to any other counties added later to the disaster area. The current list of eligible localities is always available on the Tax relief in disaster situations page on IRS.gov. 

Filing and payment relief 

The tax relief postpones various tax filing and payment deadlines that occurred from Feb. 15, 2025, through Nov. 3, 2025 (postponement period). As a result, affected individuals and businesses will have until Nov. 3, 2025, to file returns and pay any taxes that were originally due during this period. 

This means, for example, that the Nov. 3, 2025, deadline will now apply to: 

• Individual income tax returns and payments normally due on April 15, 2025.
• 2024 contributions to IRAs and health savings accounts for eligible taxpayers.
• Quarterly estimated tax payments normally due on April 15, June 16 and Sept. 15, 2025.
• Quarterly payroll and excise tax returns normally due on April 30, July 31 and Oct. 31, 2025.
• Calendar-year partnership and S corporation returns normally due on March 17, 2025.
• Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2025.
• Calendar-year tax-exempt organization returns normally due on May 15, 2025. 

In addition, penalties for failing to make payroll and excise tax deposits due on or after Feb. 15, 2025, and before March 3, 2025, will be abated as long as the deposits were made by March 3, 2025. 

The Disaster assistance and emergency relief for individuals and businesses page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.  

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief. 

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the IRS Special Services toll-free number at 866-562-5227 to update their address and request disaster tax relief. 

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS Special Services toll-free number at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization. Disaster area tax preparers with clients located outside the disaster area can choose to use the Bulk Requests from Practitioners for Disaster Relief option, described on IRS.gov. 

Additional tax relief 

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2025 return normally filed next year), or the return for the prior year (2024). Taxpayers have extra time – up to six months after the due date of the taxpayer’s federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. For individual taxpayers, this means Oct. 15, 2026. Be sure to write the FEMA declaration number – 4861-DR − on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts, for details. 

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525, Taxable and Nontaxable Income, for details. 

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow. 

The IRS may provide additional disaster relief in the future. 

Taxpayers who do not qualify for disaster tax relief may qualify for reasonable cause penalty abatement. See Penalty Relief for Reasonable Cause for additional information.  

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov. 

Reminder about tax return preparation options

• Eligible individuals or families can get free help preparing their tax return at Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) sites. To find the closest free tax help site, use the VITA Locator Tool or call 800-906-9887. Note that normally, VITA sites cannot help claim disaster losses.
• To find an AARP Tax-Aide site, use the AARP Site Locator Tool or call 888-227-7669.
• Any individual or family whose adjusted gross income (AGI) was $84,000 or less in 2024 can use IRS Free File’s Guided Tax Software at no cost. There are products in English and Spanish.

• Another Free File option is Free File Fillable Forms. These are electronic federal tax forms, equivalent to a paper 1040, and are designed for taxpayers who are comfortable filling out IRS tax forms. Anyone, regardless of income, can use this option.
• MilTax, a Department of Defense program, offers free return preparation software and electronic filing for federal tax returns and up to three state income tax returns. It’s available for all military members and some veterans, with no income limit.

WASHINGTON - The Internal Revenue Service issued a reminder today that in most cases retirees who turned 73 in 2024 must begin receiving payments from Individual Retirement Arrangements (IRAs), 401(k)s and similar workplace retirement plans by Tuesday, April 1, 2025. 

Required minimum distributions (RMDs) are payments typically made by year end. However, individuals who turned 73 in 2024 can delay their first RMD until April 1, 2025. This special rule applies to IRA owners and participants born after Dec. 31, 1950. 

Two RMD payments are possible in the same year 

The April 1 RMD deadline is for the first year only. For subsequent years, the distribution is due by December 31. 

Taxpayers receiving their first required distribution for 2024 in 2025 (by April 1) must take their second RMD for 2025 by Dec. 31, 2025. The first distribution is taxable in 2025 and reported on the 2025 tax return, along with the regular 2025 distribution. 

Retirement plans needing RMDs 

RMD rules apply to owners of traditional, Simplified Employee Pension (SEP) and Savings Incentive Match Plan for Employees (SIMPLE) IRAs while the original owner is alive, and to participants in 401(k), 403(b) and 457(b) plans. Roth IRAs are not subject to required minimum distributions. 

An IRA trustee must inform the IRA owner of the RMD amount or, alternatively, offer to calculate the distribution amount. The RMD amount will typically appear on Form 5498, IRA Contribution Information, in Box 12b. For a 2024 distribution due by April 1, 2025, the amount is shown on the 2023 Form 5498, usually issued early in 2024. 

Some individuals can defer RMDs 

The April 1 deadline applies to all traditional IRA owners, as well as most workplace retirement plan participants. Some individuals with workplace plans, however, may be able to delay their RMD. 

Most participants can wait until April 1 after retiring to receive distributions if their workplace plan allows it. This exception does not apply to 5% business owners or to participants in SEP and SIMPLE IRA plans. See Publication 575, Pension and Annuity Income, for information regarding the tax on excess accumulation. 

Public school employees and certain tax-exempt organization staff with pre-1987 403(b) plan accruals should consult their employer, plan administrator or provider for guidance on handling these accruals. 

IRS online tools and publications are available for assistance 

Many answers to questions about RMDs can be found at Required Minimum Distribution FAQs on IRS.gov. To determine their distribution amount, most taxpayers can use Table III (Uniform Lifetime) on that page, while Table II should be used by married taxpayers whose spouse is more than 10 years younger and is their sole beneficiary. 

For a 2024 required minimum distribution (due April 1, 2025), refer to the life expectancy tables in Appendix B of Publication 590_‑B, Distributions from Individual Retirement Arrangements (IRAs). Table III shows that the RMD for an individual who is 73 years old in 2024 is typically based on a distribution period of 26.5 years. The Dec. 31, 2023, balance should be divided by 26.5 to calculate the RMD for 2024. 

IRS Publication 590-B, Distributions from Individual Retirement Arrangements, also includes worksheets, examples, and additional information that can assist anyone in determining their RMD. Publication 590 provides additional RMD information and resources for use in preparing 2024 federal tax returns. 

For further details on RMDs and other changes impacting retirees and retirement plan participants, visit Tax information for seniors & retirees on IRS.gov.

Filing season reminders, tax credits and tax scams awareness

• Find tax records with the IRS Individual Online Account
• Tax Time Guide provides updates that may affect 2024 tax returns
• Prevent common errors when filing a tax return
• Check eligibility for these credits
• Learn about the IRS Dirty Dozen
• More information

Find tax records with the IRS Individual Online Account

The IRS has made it easier for taxpayers to file their taxes by adding information return documents to their IRS Individual Online Account. Now taxpayers can find important tax records in one digital location.

IRS enhances services and convenience for taxpayers

Tax Time Guide provides updates that may affect 2024 tax returns

IRS provides updated information to help taxpayers file an accurate federal tax return with the Tax Time Guide series.

IRS Tax Time Guide helps taxpayers when filing a return

Prevent common errors when filing a tax return

Knowing what common errors to look out for can help taxpayers be better prepared when they file their federal tax return.

Errors taxpayers should watch out for

Check eligibility for these credits

Earned Income Tax Credit:  Workers can use the credit to reduce their taxes or increase their refund.

Child Tax Credit: Families with qualifying children get a tax break. 

Saver's Credit: Those who make eligible contributions to an IRA or employer-sponsored retirement plan may qualify for this credit. 

Education credits, deductions and savings plans: These can help taxpayers with their expenses for higher education..

Energy Efficient Home Improvement Credit: Homeowners may qualify if they made qualified energy-efficient improvements.

Learn about the IRS Dirty Dozen

Each year, the IRS Dirty Dozen lists common scams that taxpayers may encounter anytime but many schemes peak during tax season as people prepare their returns or hire someone to help with their taxes.

The Dirty Dozen represents the worst of the worst tax scams

More information

IRS provides help for taxpayers online and on social media. 

• Get Ready shares steps to make it easier to file a tax return.
• Let Us Help you has information and resources on a wide range of topics.
• File Your Tax Return has information on how and when to file a tax return.
• Volunteer Income Tax Assistance and Counseling for the Elderly programs offer free basic tax return preparation to qualified taxpayers; IRS-certified volunteers help taxpayers prepare their returns.
• Interactive Tax Assistant guides taxpayers to answers to their tax questions.

IRS Social Media has links to the official IRS accounts on X, Facebook, Instagram, LinkedIn and YouTube.

WASHINGTON — The Internal Revenue Service encouraged taxpayers who have yet to prepare and file their tax returns to consider taking advantage of the many free options available – including Direct File, a free, fast and easy way to file directly with the IRS, now available in 25 states.

In addition to Direct File, IRS Free File also offers free tax preparation software through its partners on IRS.gov. Also, the IRS offers free, in-person, help through its Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) programs.

Direct File

IRS Direct File, the latest filing option for taxpayers, is a web-based service that allows taxpayers to file directly with the IRS for free. It works on mobile phones, laptops, tablets or desktop computers. The system leads taxpayers step-by-step through a series of questions to prepare their federal tax return. Once taxpayers have completed their federal tax return, the Direct File system automatically guides them to complete their state tax filings if they have a state tax obligation.

Direct File began as a pilot program last year and, after receiving overwhelmingly positive reviews from taxpayers, is now available in 25 states.

Direct File features a data import tool that allows taxpayers to automatically import data from their IRS account, including personal information, the taxpayer’s Identity Protection PIN and some information from the taxpayer’s W-2. Live chat is available, and users can opt into additional authentication and verification, which allows customer service representatives to provide more information. In addition, there is a chat bot to help guide users through the eligibility checker.

Taxpayers can use Direct File if they have certain types of income, outlined in more detail in the Direct File fact sheet. Starting this month, taxpayers reporting retirement income, contributions or rollovers can also use Direct File.

Last year Direct File supported taxpayers claiming the Earned Income Tax Credit, the Child Tax Credit and the Credit for Other Dependents.

This year, Direct File will also cover taxpayers claiming the:

• Child and Dependent Care Credit
• Premium Tax Credit
• Credit for the Elderly and Disabled
• Retirement Savings Contribution Credits
• Health Savings Accounts deductions

The Treasury Department estimates that more than 30 million taxpayers are now eligible to use Direct File across the following 25 states: Alaska, Arizona, California, Connecticut, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington state, Wisconsin and Wyoming.

IRS Free File

Most taxpayers can file electronically for free by using IRS Free File, available only on IRS.gov.

Currently in its 23rd year, IRS Free File offers free tax preparation software from eight companies in the public-private partnership with the IRS. As part of this partnership, tax preparation and filing software partners offer their online products to eligible taxpayers for free.

This year IRS Free File guided tax software products are available to taxpayers with a 2024 adjusted gross income (AGI) of $84,000 or less. IRS Free File also provides fillable forms for use by any taxpayer, regardless of income, who is comfortable preparing their own return. To access these free tools, taxpayers must start from the IRS Free File page on IRS.gov.

Other free options to file tax returns

In addition to Direct File and IRS Free File, the IRS reminds taxpayers that there are other free programs available to help:

• Volunteer Income Tax Assistance/Tax Counseling for the Elderly. Taxpayers can find organizations in their community with IRS certified volunteers that provide free tax help for eligible taxpayers including working families, the elderly, the disabled and people who speak limited English.
• MilTax. A Department of Defense program, MilTax generally offers free return preparation and electronic filing software for federal income tax returns and up to three state income tax returns for all military members, and some veterans, with no income limit.

Beware of scams

Criminals often impersonate IRS employees and sound very convincing when calling taxpayers in aggressive and sophisticated ways. Taxpayers should stay vigilant and be alert to scams when dealing with taxes.

The IRS usually contacts taxpayers with a letter in the mail explaining what they owe and how to question or appeal what they owe. The IRS will not call, text or contact anyone via social media, specifically, to demand immediate tax payment.

If taxpayers are unsure whether they owe money to the IRS, they can view their tax information using their Online Account on IRS.gov.

More taxpayers in more states will be able to file their 2024 federal taxes directly with the IRS for free. This filing season, Direct File includes new features to make filing taxes quicker and easier.

With IRS Direct File, eligible taxpayers can:

• Prepare and file a 2024 federal tax return online – for free – in English or Spanish
• Import data from their IRS account, including personal information, their IP PIN and some information from their W-2, if it’s available
• Add their tax information with step-by-step guidance
• Connect with their state filing tool to file for free
• Get help in English and Spanish in real-time live chat with IRS customer support specialists for Direct File
• Use smartphones, laptops, tablets and desktop computers to file online

Participating states where Direct File is available
This year, Direct File is open to eligible taxpayers in 25 participating states to file their taxes directly with the IRS for free: 12 states that were part of the pilot last year, plus 13 new states where Direct File is available in 2025.
Alaska, Arizona, California, Connecticut, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington state, Wisconsin and Wyoming.

Eligibility
Taxpayers who lived and worked in one of the 25 participating states for all of 2024 can use Direct File if they report:

• W-2 wage income
• SSA-1099 Social Security income
• 1099-G unemployment compensation
• 1099-INT interest income
• 1099-MISC for Alaska residents reporting the Alaska Permanent Fund Dividend

Starting March 5, 2025, taxpayers can use Direct File to report:

• 1099-R retirement income
• Contributions to and most distributions from employer-sponsored retirement plans, like a 401(k), pension, annuity, 403(b), or governmental 457(b)
• Direct rollovers from one employer-sponsored retirement plan to another, or to an IRA

Taxpayers can't use Direct File if they had other types of income, such as gig economy, rental income or business income.

Credits
Taxpayers can use Direct File to claim these credits:

• Earned Income Tax Credit
• Child Tax Credit
• Credit for Other Dependents
• Child and Dependent Care Credit
• Premium Tax Credit for Marketplace Health insurance coverage
• Credit for the Elderly or the Disabled
• Retirement Savings Contributions Credit

Taxpayers who live in Washington state will be guided to the state’s website to apply for the Working Families Tax Credit.

Deductions
Taxpayers can use Direct File to claim these deductions:

• Standard deduction
• Student loan interest
• Educator expenses
• Health Savings Account contributions

Taxpayers can't use Direct File if they itemize deductions or claim other tax deductions.

How to file using IRS Direct File

1. Go to directfile.irs.gov to check your eligibility and see if Direct File is a good fit for you. If you’re not eligible, we’ll connect you to alternative filing options.
2. Eligible taxpayers who have a Social Security number (SSN) or an Individual Taxpayer Identification Number (ITIN), may sign in or create an account to verify their identity to access Direct File. The IRS lets you access most tax tools with one account using the same login and password. If you already have an IRS online account, you can use the same sign-in for Direct File.
3. Complete your return – Direct File will guide you through a series of questions to help you file quickly and easily. You can get support from dedicated IRS customer support specialists through a live chat feature if you need help.
4. Review your return, input your payment or refund information, and submit your federal return! Direct File will email you once your return has been accepted by the IRS.
5. File your state return. If you need to file a state return, Direct File will connect you with your state’s online free filing tool to help you get started. In many cases, Direct File users can even import their federal return data directly to their state tool.

Save time importing tax information directly from the IRS
Direct File saves taxpayers time by allowing them to import certain data from their IRS account. Taxpayers can review and edit the information before the return is submitted to the IRS.

Direct File can import the following information:

• Employment and federal wage information from your Form W-2, if it’s available
• Identity Protection PIN (IP PIN), if you use one
• Your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN)
• Your name, date of birth, mailing address, email address and phone number

Income limits for Direct File
While there are no income limits for Direct File, additional limitations apply to taxpayers with household wages exceeding $125,000. Currently, Direct File does not support all tax situations for all taxpayers.

You can’t use Direct File if:

• Your wages exceed $200,000 ($168,600 if you had more than one employer)
• You file as Married Filing Jointly, and your spouse’s wages are more than $200,000 ($168,600 if your spouse had more than one employer)
• You file as Married Filing Jointly, and you and your spouse's wages are more than $250,000
• You file as Married Filing Separately, and your wages are more than $125,000

Get help with Direct File
Taxpayers can get help with technical support or basic tax law questions from IRS customer service representatives through live chat in English and Spanish.

You can chat live or request a callback from an IRS Direct File customer support specialist when you’re logged in.

New this year: You can opt into additional authentication and verification, which will allow customer support specialists to provide more detailed support.

Questions or issues unrelated to Direct File are routed to other IRS support staff.

Find out more about Direct File

• Learn more about how Direct File works
• Sign up for the Direct File newsletter
• Publication 5916, File for fee with IRS Direct File
• Publication 5917, IRS Direct File- What you need to know
• Publication 5949, Helpful tips to prepare you for IRS Direct File
• Publication 5952, Are you ready to file with IRS Direct File?

Explore other free filing options

IR-2025-30, March 10, 2025

WASHINGTON — The Internal Revenue Service encouraged taxpayers who have yet to prepare and file their tax returns to consider taking advantage of the many free options available – including Direct File, a free, fast and easy way to file directly with the IRS, now available in 25 states.

In addition to Direct File, IRS Free File also offers free tax preparation software through its partners on IRS.gov. Also, the IRS offers free, in-person, help through its Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) programs.

Direct File

IRS Direct File, the latest filing option for taxpayers, is a web-based service that allows taxpayers to file directly with the IRS for free. It works on mobile phones, laptops, tablets or desktop computers. The system leads taxpayers step-by-step through a series of questions to prepare their federal tax return. Once taxpayers have completed their federal tax return, the Direct File system automatically guides them to complete their state tax filings if they have a state tax obligation.

Direct File began as a pilot program last year and, after receiving overwhelmingly positive reviews from taxpayers, is now available in 25 states.

Direct File features a data import tool that allows taxpayers to automatically import data from their IRS account, including personal information, the taxpayer’s Identity Protection PIN and some information from the taxpayer’s W-2. Live chat is available, and users can opt into additional authentication and verification, which allows customer service representatives to provide more information. In addition, there is a chat bot to help guide users through the eligibility checker.

Taxpayers can use Direct File if they have certain types of income, outlined in more detail in the Direct File fact sheet. Starting this month, taxpayers reporting retirement income, contributions or rollovers can also use Direct File.

Last year Direct File supported taxpayers claiming the Earned Income Tax Credit, the Child Tax Credit and the Credit for Other Dependents.

This year, Direct File will also cover taxpayers claiming the:

• Child and Dependent Care Credit
• Premium Tax Credit
• Credit for the Elderly and Disabled
• Retirement Savings Contribution Credits
• Health Savings Accounts deductions

The Treasury Department estimates that more than 30 million taxpayers are now eligible to use Direct File across the following 25 states: Alaska, Arizona, California, Connecticut, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington state, Wisconsin and Wyoming.

IRS Free File

Most taxpayers can file electronically for free by using IRS Free File, available only on IRS.gov.

Currently in its 23rd year, IRS Free File offers free tax preparation software from eight companies in the public-private partnership with the IRS. As part of this partnership, tax preparation and filing software partners offer their online products to eligible taxpayers for free.

This year IRS Free File guided tax software products are available to taxpayers with a 2024 adjusted gross income (AGI) of $84,000 or less. IRS Free File also provides fillable forms for use by any taxpayer, regardless of income, who is comfortable preparing their own return. To access these free tools, taxpayers must start from the IRS Free File page on IRS.gov.

Other free options to file tax returns

In addition to Direct File and IRS Free File, the IRS reminds taxpayers that there are other free programs available to help:

• Volunteer Income Tax Assistance/Tax Counseling for the Elderly. Taxpayers can find organizations in their community with IRS certified volunteers that provide free tax help for eligible taxpayers including working families, the elderly, the disabled and people who speak limited English.
• MilTax. A Department of Defense program, MilTax generally offers free return preparation and electronic filing software for federal income tax returns and up to three state income tax returns for all military members, and some veterans, with no income limit.

Beware of scams

Criminals often impersonate IRS employees and sound very convincing when calling taxpayers in aggressive and sophisticated ways. Taxpayers should stay vigilant and be alert to scams when dealing with taxes.

The IRS usually contacts taxpayers with a letter in the mail explaining what they owe and how to question or appeal what they owe. The IRS will not call, text or contact anyone via social media, specifically, to demand immediate tax payment.

If taxpayers are unsure whether they owe money to the IRS, they can view their tax information using their Online Account on IRS.gov.

Inside This Issue

1. Second quarter interest rates unchanged
2. Technical Guidance

1.  Second quarter interest rates unchanged

The IRS announced no change in interest rates beginning April 1. The interest rates are computed from the federal short-term rate determined during January 2024. See Revenue Ruling 2025-07 for details.

Back to top

2.  Technical Guidance

Notice 2025-16 provides for adjustments to the limitation on housing expenses for purposes of section 911 of the Internal Revenue Code for the 2025 tax year. These adjustments are made on the basis of geographic differences in housing costs relative to housing costs in the United States.

Revenue Procedure 2025-17 adds Ukraine, Iraq, Haiti, and Bangladesh to the list of waiver countries for tax year 2024 for which the minimum time requirements are waived. Generally, U.S. citizens or resident aliens living and working abroad are taxed on their worldwide income.

Revenue Ruling 2025-07 provides the second quarter interest rates for 2025, including the rates for underpayments and overpayments. The rates for interest determined under Section 6621 of the code for the calendar quarter beginning April 1, 2025, will be 7 percent for overpayments (6 percent in the case of a corporation), 7 percent for underpayments, and 9 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 4.5 percent.

WASHINGTON — The Internal Revenue Service today announced interest rates will remain the same for the calendar quarter beginning April 1, 2025.

For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily.  Here is a complete list of the new rates: 

·         7% for overpayments (payments made in excess of the amount owed), 6% for corporations.

·         4.5% for the portion of a corporate overpayment exceeding $10,000.

·         7% for underpayments (taxes owed but not fully paid).

·         9% for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus three percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points and the overpayment rate is the federal short-term rate plus two percentage points.  The rate for large corporate underpayments is the federal short-term rate plus five percentage points.  The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates announced today are computed from the federal short-term rate determined during January 2025.  See the revenue ruling for details.

Revenue Ruling 2025-7 announcing the rates of interest, is attached and will appear in Internal Revenue Bulletin 2025-13, dated March 24, 2025.