Code for America pilots new state tax-filing tool in Colorado, New Jersey

After the winding down of IRS’s Direct File program, the civic tech nonprofit Code for America is partnering with Colorado and New Jersey to test a new online filing platform called Simple File.

The mobile-friendly tool, launched earlier this month and available through Oct. 15, is designed to help eligible low-income households claim state tax credits without completing a full tax return. Unlike traditional tax filing software, Simple File targets residents who do not have a federal filing obligation but may still qualify for valuable state tax credits, such as the child tax credit.

The pilot program arrives as states look to fill gaps left by the federal government’s discontinuation of Direct File, a free and short-lived service designed to allow eligible taxpayers file their federal income taxes directly with the IRS. The Trump administration canceled the program last year after several states had started integrating the IRS-developed system into their own digital tax services.

Courtney O’Reilly, associate program director at Code for America, said that after the program ended, states began exploring how their own digital tools could help residents maintain access to tax benefits. “In the absence of Direct File, states are looking for opportunities to improve access to really valuable state credits,” O’Reilly said in an interview. She estimated that 7 million people in the U.S. miss out on roughly $15 billion in tax credits each year, particularly state child and family tax credits.

Simple File builds on Code for America’s GetCTC — “Get Child Tax Credit” — platform, while incorporating design principles developed for Direct File, like its “fact graph” architecture. The feature analyzes different tax scenarios and data relationships, and automatically applies rules from the tax code.

User research also helped shape the platform’s design. O’Reilly said early testing found that in addition to a more streamlined experience, tax filers told Code For America they wanted more transparency about why certain information was being collected and how eligibility decisions were being made. Rather than simply minimizing the number of questions, the tool includes optional explanations that describe how information affects credit eligibility and how refund amounts are calculated.

“Transparency really equates to trust,” O’Reilly said. “One of the things we saw with Direct File was that Direct File helped create more trust within the IRS and the clients they were serving, and so we wanted to make sure that we were learning from that.”

O’Reilly said Colorado and New Jersey were selected for the pilot for different reasons. New Jersey had already partnered with Code for America on a companion state filing tool for Direct File, while Colorado’s generous refundable child tax credit — worth up to $4,400 per qualifying child in some cases — made it an ideal testing ground. She acknowledged that roughly 10 states — including New York, New Mexico and Oregon — currently offer similarly structured refundable credits that could eventually support Simple File.

“We already had a really close partnership with them, and really, they came to us being like, What do we do next? What should we be doing to better meet the need of needs of folks?” she explained. “So they were an easy, like, Let’s go, let’s try to figure out that how to serve this specific population.“

During the pilot, Code for America will measure how many users had not previously filed taxes, the total value of credits claimed and user satisfaction. The organization is also exploring expanding the platform to prior-year filings and additional credits, including Colorado’s disability assistance credit.

While the tool is not intended to replace Direct File, O’Reilly said the project demonstrates how states can continue modernizing digital services to help residents claim benefits to which they’re already entitled: “This is a way for us to serve families who need money right now and aren’t being served by other products that are out there. We’re talking about a lot of money that clients are missing out on, and we are excited to see how many thousands of folks can use this tool to claim thousands of dollars in tax credits.”