TaxWorks Blog

Utah E-file Mandates

A tax return preparer, or two or more tax return preparers affiliated together in the same establishment, who prepare 101 or more individual income tax returns, must submit all individual income tax returns electronically or use 2D barcode technology.Exceptions: Taxpayers who elect out of electronic filing or 2D barcode technology, returns that include a schedule that cannot be electronically filed or by 2D barcode, and undue hardship on the tax return preparer.

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South Carolina State Mandates

Preparers who prepare more than 100 individual income tax returns in the previous tax-filing season are required to electronically file all individual income tax returns.

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Rhode Island E-file Mandate

Starting in calendar year 2009 (TY08), preparers who prepared more than 100 individual income tax returns in the previous tax-filing season are required to e-file all individual returns. The tax administrator won’t require e-filing by a paid preparer’s client who specifically requests that a return be filed on paper.

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Oklahoma E-file Mandates

Preparers who prepare more than 50 individual income tax returns in the previous tax-filing season are required to e-file all individual income tax returns. There is an opt-out if the taxpayer indicates on the return that they do not want the return to be filed by electronic means.

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New York E-file Mandates

Individual: If a practitioner files a total of over 100 returns for both individual and partnership, they must file all of their individual and partnership returns electronically. This means that if they filed 101 individual returns and only 1 partnership return, they must file all of their individual and partnership returns electronically. A $50 penalty applies to each return or extension that they fail to e-file, unless the taxpayer opts out of e-filing or they have other reasonable cause for failure to comply.

Partnership: Partnership and individual returns fall under the same New York Articles so the Partnership mandate is being combined with the individual practitioner mandate.

Corporate: The new mandate requires tax return preparers who meet certain requirements to e-file authorized tax documents beginning on or after January 1, 2009. The mandate also requires electronic payment of the balance due on any authorized tax document.

There are two parts to this mandate:

Part I – If a preparer prepares over 100 corporate business documents, then they must file their corporate returns electronically. The following are considered corporate business documents and figure into the threshold for the mandate: Estimated payments, Extensions, and Corporate return.So, the actual threshold could be as low as 17 corporate returns for a practitioner if they filed 4 estimated payments, the extension, and the return.

Part II – If a business files their own return and they use tax software that has been approved for corporate electronic filing, they must file their return electronically.

A $50 penalty applies to each document that they fail to e-file, unless the taxpayer opted out of e-filing or they have other reasonable cause for failure to comply.

The taxpayer will be subject to a $50 per tax document penalty for failing to electronically pay the balance due. The Department cannot abate the payment penalty for reasonable cause.

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Minnesota E-file Mandates

Preparers who prepared more than 100 individual income tax returns in the previous tax-filing season are required to e-file all individual income tax returns. Exceptions: (1) Joint returns where both reciprocity and form M1NR are required to file, or (2) the SSN was used erroneously on a previously e-filed return. The preparer will be fined $5 per return for each return filed on paper.

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New Mexico State Mandates

Preparers who prepared more than 25 individual income tax returns in the previous tax-filing season are required to file all returns using electronic means. Electronic means includes electronic filing or printed returns with 2D barcodes.

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Michigan E-file Mandates

The Michigan Department of Treasury mandated electronic filing for both individual income tax and single business tax returns. Single Business Tax has been repealed for business activity after December 31, 2007, and replaced by the Michigan Business Tax (MBT) effective January 1, 2008. The e-file mandate for Single Business Tax is being continued for software developers supporting Michigan Business Tax, effective January 1, 2010, for the 2009 tax year.

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Massachusetts E-file Mandates

As of January 2006, preparers who prepared 100 or more MA Forms 1 and 1-NR-PY during the previous calendar year are required to file electronically. Preparers must continue to file electronically in subsequent years unless they prepare no more than 25 individual income tax returns. Electronic payment of tax liability for e-file individual income tax returns is encouraged, but not required. Payment may be made with the e-file return or by the taxpayer through the DOR’s website.The taxpayer may opt out of e-filing, but must file paper forms containing 2D barcodes.

(1040 Extension) As of January 2004, Personal Income Tax Extension requests with no payment or payments of $5,000 or more must be made electronically. Extensions may be filed through the TaxWorks software.
(1041) As of January 2005, Fiduciaries filing Form 2 with total Part A, Part B, and Part C net taxable income of $50,000 or more must use electronic means to make any payments to the Department. Payments may be made through the DOR’s website.

(1065) As of January 2005, Partnerships filing Forms 3 and meeting the following income thresholds, loss thresholds, or with 25 or more partners, must submit all Forms 3 and Schedules 3 K1 by electronic means.Income threshold: (1) $50,000 or more in gross income, or (2) $100,000 or more received from the sale of stock and securities. Loss threshold: (1) $50,000 or more in ordinary loss from trade or business activities, or (2) $100,000 or more in losses from the sale of stock and securities.

(1120) As of January 2005, all corporations subject to the corporate excise, including security corporations, with more than $100,000 in gross receipts or sales, must file returns and tax payments using electronic means. Exception: financial institutions, insurance companies, and public utilities.

(1120 Extension) As of January 2005, Corporate Extension requests and accompanying payments must be filed electronically. Any corporation with more than $100,000 in gross receipts or sales must e-file. In addition, any corporation making a payment of $5,000 or more with its corporate excise extension must e-file the request and make the payment by electronic means. Requests and payments can be made through the DOR’s website.

Reference MA Mandate TIR04-30 on the MA DOR website at www.dor.state.ma.us.

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RAL Denial Criteria

If the Debt Indicator received from the IRS notes that the taxpayer has an outstanding debt, the RAL will be denied.RALs automatically fall to a Refund Transfer (RT) product.

Following are some criteria that might restrict a taxpayer from receiving a RAL.We have included bank audits in the software when possible.The bank criteria varies per bank.Reference the individual bank’s user manual for details.

- You are an active military person or dependent of an active military per¬son.
- Taxpayer must be of binding age to enter into a legal agreement (age 18 in most states).
- P.O.Box instead of physical address.
- Form 8862 is present (reclaim EIC after disallowed).
- Taxpayer is dependent of another.
- No W-2s or 1099-Rs are present.
- Unable to provide a home phone number.
- Refund is greater than $10,000.
- Refund minus EITC is less than $0.

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