FTB Partners with IRS for Free Tax Filing
Summary
The California Franchise Tax Board (FTB) is partnering with the IRS to offer free tax filing services through CalFile and IRS Direct File. A new feature allowing data import from Direct File to CalFile is expected in January 2026, aiming to simplify tax filing for Californians.
What changed
The California Franchise Tax Board (FTB) has announced a continued partnership with the IRS to provide free tax filing options for Californians via CalFile and IRS Direct File. A significant enhancement is planned for January 2026, which will allow taxpayers using IRS Direct File to import their federal tax data directly into California's CalFile service. This integration aims to streamline the filing process and increase access to state and federal tax credits for eligible working families.
Regulated entities, specifically tax preparation services and potentially financial institutions that advise consumers on tax matters, should be aware of this initiative. While the immediate impact is on individual taxpayers, the FTB's move towards greater integration with federal systems may signal future trends in tax administration. Compliance officers should note the expected availability of the data import feature in January 2026 and inform relevant stakeholders or clients about this enhanced free filing option.
What to do next
- Inform relevant stakeholders and clients about the enhanced free tax filing options through CalFile and IRS Direct File, particularly the upcoming data import feature.
- Monitor FTB and IRS updates regarding the implementation of the data import functionality expected in January 2026.
Source document (simplified)
For Immediate Release
FTB partners with IRS to provide free tax filing for Californians
Sacramento - The Franchise Tax Board announced today that it will continue to work with the IRS to offer many California taxpayers the option of a free, secure and 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, as well as 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 program 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.
"We have long emphasized that CalFile is fast, easy and free," said State Controller Malia M. Cohen. "We know taxpayers want their state and federal returns prepared and filed one right after the other. Our plan to create a bridge between the state and federal systems would offer many Californians a faster, simpler way to file both their returns – first the federal, then the state – directly with the IRS and FTB."
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 are able to 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 program. Visit FTB’s CalFile page for qualifications and other information. The IRS announced on May 30 this year that it is exploring ways to expand Direct File to make more taxpayers eligible next year. See the IRS's Direct File page for updates and more information.
Last updated: 09/24/2025 The Franchise Tax Board administers two of California’s major tax programs: Personal Income Tax and the Corporation Tax. We also administer other non tax programs and delinquent debt collection functions, including delinquent vehicle registration debt collections on behalf of the Department of Motor Vehicles, and court–ordered debt. Annually, our tax programs collect more than 75 percent of the state’s general fund. For more information on other taxes and fees in California, visit: taxes.ca.gov.
Media Contacts Only
Email Public Affairs Office Phone 916-845-4800 Mail P.O. Box 1468
Sacramento, CA 95812-1468
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