Filing a federal tax return does not have to cost a household anything, yet most people who qualified for the free option skipped it last year. The Treasury Department’s own count, delivered to Congress this fall in a report on the future of free filing, put the number of households eligible for the IRS Free File program at roughly 98 million for tax year 2024. Only 2.7 million of them used it. Add in every other IRS-run or IRS-affiliated free option, and the total number of free filers still falls far short of the number who qualified to pay nothing.
What Free File Actually Requires
Free File is not one program but a partnership between the IRS and a group of private tax software companies that agree, under a standing memorandum of understanding, to offer guided preparation and free electronic filing to taxpayers under an income ceiling. The arrangement dates back to 2002, built as a way to expand no-cost filing through private companies rather than have the government run a competing system of its own. For tax year 2024, that ceiling was an adjusted gross income of $84,000, a level set specifically so that roughly 70 percent of all taxpayers would qualify. Each participating company can still layer on its own narrower rules, such as an age cutoff or a lower income limit, so a household under $84,000 has to check which of the offers actually fits before it can file for nothing. Treasury’s own survey work found that satisfaction was not the obstacle: 98.4 percent of Free File users said they would use the program again. For tax year 2024, eight private software companies took part in the Free File Alliance under a governing agreement — the ninth version of the Memorandum of Understanding on Service Standards and Disputes between the IRS and Free File, Inc., which took effect November 11, 2023. The industry consortium, not the IRS, sets each member’s narrower age or income cutoffs on top of the shared $84,000 ceiling, which is why the specific offer that fits one household may not fit its neighbor even though both technically qualify for Free File.
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The 36 Million With the Simplest Returns
Treasury broke the eligible population down further, applying the same definition of a “simple return” that had governed eligibility for the IRS’s now-suspended Direct File pilot: wages, limited interest income, and none of the more complicated schedules. By that yardstick, Treasury estimated that about 36 million of the 98 million Free File-eligible tax units had a simple return for tax year 2024. That is exactly the kind of filing situation Free File’s software is built to handle in well under an hour. Yet of that narrower, easier-to-serve group, only 2 million used Free File or any other IRS-run or IRS-affiliated free service by August 1, 2025 — a small fraction of the simplest returns in the entire eligible pool.
Where the Other 33.7 Million Went Instead
The report also tracked what the remaining simple-return filers did instead of filing for free. About 13.5 million paid a professional preparer, 19.3 million bought commercial tax software, and roughly 1 million filed on paper, which typically takes the IRS longer to process than an e-filed return. Treasury cautioned that some of these taxpayers may have found no-cost preparation directly through a commercial company outside the official Free File arrangement, so the true out-of-pocket total is probably a little softer than the raw figures suggest. Paid preparers and commercial software also offer things Free File’s income-capped partners do not always provide, such as prior-year data imports or help with an unusual form. Even accounting for all of that, the basic pattern holds: most people with the easiest returns to prepare, who owed the IRS nothing extra to file for free, paid someone or something to get it done.
The Volunteer Programs That Reach Fewer People Than Free File
Two older, in-person alternatives sit alongside Free File, and Treasury’s own numbers show they reach even fewer taxpayers. The Volunteer Income Tax Assistance program, VITA, operates through community partners at more than 5,600 sites nationwide, serves taxpayers earning up to $67,000, and produced about 1.6 million returns for tax year 2024. The Tax Counseling for the Elderly program, TCE, prioritizes filers age 60 and older, runs more than 3,900 sites with no income limit at all, and produced about 1.2 million returns, with an average filer age of 68. Combined, VITA and TCE reached fewer taxpayers than Free File did on its own, even though trained volunteers were sitting inside thousands of libraries, senior centers and community buildings within reach of most eligible households. Treasury’s own eligibility estimates make the shortfall look even larger than the raw return counts suggest. Roughly 67 million tax units qualified for VITA in tax year 2024, meaning the program’s 1.6 million returns represented a usage rate of about 2.4 percent — slightly worse than Free File’s own 2.8 percent, despite VITA requiring nothing more complicated than showing up to a staffed site. TCE’s narrower, older audience produced a better hit rate: about 22 million tax units were eligible, and the 1.2 million returns filed worked out to roughly 5.5 percent, still leaving close to 21 million eligible people age 60 and up who never used the one free, in-person program built specifically for them.
Treasury’s Own Fix Is Promotion, Not a New Program
Treasury’s report does not call for building a new filing system to close this gap. It states plainly that the agency should refocus its efforts on strengthening the free programs that already exist, “particularly Free File,” while engaging outside partners to modernize the offerings and address the persistent lack of awareness of existing options. In other words, Treasury’s own diagnosis is that roughly 95 million households did not skip a free return because the tax code made one hard to find — they skipped it because nobody told them it existed before the deadline passed.
The Assistance That Goes Unused
Free tax preparation is not the only help that goes unused simply because nobody sends a reminder. Every year, households qualify for support that has to be requested rather than something that arrives automatically, and the same awareness gap that leaves millions of eligible filers paying a preparer shows up across other programs too.
A separate guide lays out programs that work the same way, including free home weatherization, state unclaimed property searches, and Extra Help for prescription costs.
See the full program list and income limits in The Benefits Checklist.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
