Tax season has arrived once again, but 2026 brings a mix of new programs, policy changes, and deadlines that Americans need to know about—especially those living in North Carolina, Colorado, and Illinois. With the Internal Revenue Service (IRS) and state revenue departments opening their digital doors for returns, taxpayers are navigating the end of some federal initiatives, the introduction of new savings accounts, and fresh deductions that could impact their bottom line.
One of the most talked-about developments this year is the shutdown of the IRS Direct File program. According to USA TODAY, the Trump administration officially ended Direct File, a free federal tax filing option initially launched during President Joe Biden’s term as a pilot in 2023. The program expanded to 25 states, including North Carolina, by 2025. Supporters hoped it would simplify tax filing for millions, but critics argued that it was costly to develop and suffered from low participation—just under 141,000 returns were filed during its 2023 pilot, making it the least-used free tax preparation program. As a result, taxpayers now have one less free filing option in 2026.
Despite the demise of Direct File, several free or low-cost alternatives remain. The IRS Free File program, for instance, lets eligible taxpayers—those with an adjusted gross income (AGI) of $84,000 or less in 2024—use guided tax software from private partners at no cost. This program also offers fillable forms for anyone comfortable preparing their own return, regardless of income. USA TODAY reports that the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs, staffed by IRS-certified volunteers, continue to help working families, seniors, and people with limited English skills. The AARP Foundation’s Tax-Aide, part of TCE, is the largest free, volunteer-staffed tax prep program in the nation, assisting nearly 1.7 million taxpayers in 2024 alone.
Military families and some veterans can take advantage of MilTax, a Department of Defense program offering free federal and up to three state tax returns with no income limit. Meanwhile, commercial giants like H&R Block and TurboTax still provide free online filing for straightforward returns—though eligibility is limited, with about 52% qualifying for H&R Block’s free edition and 37% for TurboTax’s.
For Coloradans, the state’s Revenue Online service allows free e-filing of state income taxes. The Detroit Free Press notes that the IRS began accepting 2025 tax returns on January 26, 2026, with Colorado following suit a day later. Federal and state returns are due by April 15, 2026—a Wednesday this year. If you can’t file on time, you can request a six-month extension, but Colorado requires that at least 90% of taxes owed are already paid to qualify for the extension, extending the deadline to October 15, 2026.
Missing the federal tax deadline can be costly. The standard penalty is 5% of any tax due for each month the return is late, up to a maximum of 25%. If you file but don’t pay, or if you get an extension, the penalty drops to 0.5% per month on the unpaid amount.
Taxpayers are also eyeing several new deductions for the 2025 tax year. As reported by USA TODAY and the Detroit Free Press, the One Big Beautiful Bill Act, signed into law on July 4, 2025, introduced tax breaks on overtime pay, tips, adults age 65 and older, and new car loans. These deductions are nuanced and may not apply to everyone, but they could bring significant savings to those who qualify.
Another headline-grabbing initiative is the launch of Trump Accounts, a new federal savings program promoted by President Donald Trump at a Washington, D.C. summit on January 28, 2026. According to the Chicago Tribune, Trump Accounts were created by the Great Big Beautiful Bill passed in summer 2025. They’re designed for children born between 2025 and 2028: the government will automatically create an account for any eligible baby with a Social Security number and deposit $1,000 as seed money. Parents and others can contribute up to $5,000 a year until the child turns 18, with employers allowed to chip in up to $2,500 annually. State and local governments and private charities can also contribute. Contributions are made after-tax, but withdrawals of those contributions are tax-free, while earnings are taxed upon withdrawal.
Generally, money can’t be withdrawn from a Trump Account until the year the child turns 18—after which it acts like a traditional Individual Retirement Account (IRA). That means penalty-free withdrawals for education expenses or a first-time home purchase, and no penalties at all after age 59½. Contributions can begin in July 2026, either while filing taxes with IRS Form 4547 or through an online portal expected to launch by summer. President Trump declared, “Perhaps no provision of the 'Great Big Beautiful Bill' will prove more consequential than Trump accounts,” highlighting the administration’s hopes for the program’s long-term impact.
For families not interested in Trump Accounts, other savings options remain robust. A Tax Foundation analysis cited by Chicago Tribune points out that 529 education savings accounts offer more flexibility and tax benefits for education expenses. Parents can also consider traditional savings accounts, certificates of deposit, custodial brokerage accounts, or even custodial Roth IRAs for children with earned income from small jobs. Trusts, while more expensive to set up, offer another avenue for securing a child’s financial future.
As for refunds, the IRS says you can check the status of your federal return online 24 hours after e-filing, three or four days after e-filing a prior-year return, or four weeks after mailing a paper return. The refund tracker updates daily and provides clear status updates: Return Received, Refund Approved, and Refund Sent. Most refunds for e-filed returns are issued within 21 days. For state refunds, timelines vary. North Carolina typically processes electronic returns in three to six weeks (up to 12 weeks for paper filings), while Colorado estimates three to five weeks for e-filed returns and up to three months for mailed ones. Illinois filers using MyTax Illinois can expect refunds four weeks after e-filing or four to eight weeks for paper returns. Each state offers online tools to check refund status, often requiring just your Social Security number and the refund amount.
Taxpayers in Illinois can file state taxes for free using MyTax Illinois if they meet eligibility criteria, including residency and having a valid Social Security or taxpayer identification number. Colorado residents benefit from the state’s Revenue Online service for free filing. Nationwide, the IRS2Go mobile app provides another convenient way to track federal refunds.
With the IRS and state agencies rolling out new policies, deadlines, and digital tools, this tax season is anything but ordinary. From the end of Direct File to the introduction of Trump Accounts and new deductions, Americans have plenty to keep in mind as they prepare their 2025 tax returns. Staying informed and taking advantage of available resources can make a world of difference as April 15 approaches.