Through the first month of the 2025 tax season, more than 3,400 Oregon taxpayers have electronically filed their income tax returns directly with the state using Direct File Oregon. More than 1,400 of those state returns were filed in combination with federal tax returns using IRS Direct File.
The option to use the combination of IRS Direct File and Direct File Oregon to file both federal and state income taxes is new this year.
“Direct file is interview based,” said Megan Denison, Personal Tax and Compliance Division administrator at the Oregon Department of Revenue. “You’ll start at the IRS website and sign-in to your IRS account through ID.me. You will be asked to answer a series of questions and enter your tax information. Once you complete your federal return, you’ll sign in to your Oregon Revenue Online account and your federal tax information will be loaded into Direct File Oregon. A few more questions and you’ll be done.”
The department has released a helpful video with tips for using the federal and state direct file combination, she said.
Taxpayers using the combination of IRS Direct File and Direct File Oregon have been completing their Oregon returns in about 16 minutes, she said. Taxpayer response has been positive with survey feedback averaging 4.5 on a five-point scale.
IRS Direct File does not support all return types. Specifically, taxpayers with dividends reported on Form 1099-DIV and capital gains or losses are not supported. Income from pensions, reported on Form 1099-R, won’t be supported until later in March.
“The IRS estimates that 640,000 Oregon taxpayers will be among 32 million taxpayers nationally who will be able to use the new free option,” Denison said. “The IRS expanded eligibility this year to cover more tax situations. To find out if they qualify, taxpayers can use the eligibility checker on the IRS website. They’ll be asked a few simple questions about the types of income they report on their tax return and a few more about credits and deductions they claim.”
To use IRS Direct File taxpayers must have an IRS online account. Taxpayers who don’t already have IRS online account should sign up with ID.me and create an account before beginning the filing process.
Taxpayers who want to import their federal return information into Direct File Oregon must have a Revenue Online account to file their state income tax return. Taxpayers who don’t already have a Revenue Online account can create one by following the Revenue Online link on the department’s website.
Denison also pointed out that taxpayers who aren’t eligible to use IRS Direct File to file their federal return may still be able to file their state return with Direct File Oregon.
“The IRS first offered a direct file option as part of a pilot program in 12 states last year,” Denison said. “The Treasury Department announced in May that it would make IRS Direct File a permanent option for taxpayers and invited all 50 states to participate to create a seamless free filing system for both federal and state taxes. Oregon was the first of 13 new states to accept the invitation from the IRS in June.
“In 2024, we offered Direct File Oregon as an option to file Oregon income taxes directly with the state through our online portal, Revenue Online. By connecting Direct File Oregon and IRS Direct File, we now offer an option to seamlessly e-file both state and federal income taxes for free.”
Public computer kiosks for use filing taxes with Direct File Oregon and free fillable forms are available in department regional offices in Bend, Eugene, Gresham, and Portland.
In addition, volunteers from the department are traveling to libraries in 18 different communities across the state in February, March, and April to assist taxpayers in using the free combination of IRS Direct File and Direct File Oregon to complete their returns. More information, including dates, times, and locations, can be found on the department’s website.
