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e-file - mandate for individual income tax and partnerships FAQs
What are the changes to the mandate for tax year 2008?
For tax years beginning on or after January 1, 2008, the income tax e-file mandate for tax return preparers now includes partnership returns (including Form IT-204-LL) and partnership extensions, in addition to personal income tax returns and extensions.
Please note that a separate mandate applies for certain other tax documents filed on or after January 1, 2009. For more information on this mandate please see our FAQs for the e-file business mandate.
Who is subject to the e-file mandate?
You are subject to the income tax e-file mandate for tax year 2008 if you are a tax return preparer who was subject to the income tax e-file mandate during a prior calendar year, or who:
A tax return preparer is a person or entity who prepares for compensation, or who employs or engages one or more persons to prepare for compensation, any return or claim for refund.
What forms must be e-filed for tax year 2008?
If you are subject to the income tax e-file mandate, all personal income tax returns and extensions, partnership returns (including IT-204-LL) and partnership extensions must be e-filed.
If you are subject to the mandate, you must use NYS approved e-file tax software that supports the e-filing of personal income tax and partnership returns, and personal income tax and partnership extensions for tax year 2008.
Will you notify me if I am subject to the e-file mandate?
It is the responsibility of the tax return preparer to comply with the e-file mandate.
How do I determine if I meet the 100 return threshold and am subject to the e-file mandate?
Count the original individual income tax and partnership returns that you prepared for tax year 2007 in calendar year 2008. Use the combined total for these filings. You are not required to include extensions, amended returns, or returns filed for prior years when you are determining whether or not you meet the 100 return threshold for the income tax e-file mandate.
Please note that even though you are not required to count extensions to determine if you are subject to the income tax e-file mandate, once it is determined that you are subject to the e-file mandate you must also e-file extensions.
Also, once you are subject to the mandate, you remain subject to it for subsequent years, regardless of the number of returns that you prepare.
I prepare personal income tax group returns for nonresident partners/shareholders. How should these returns be counted with regard to the threshold?
A personal income tax group return is considered to be a group of separate returns which meets the individual filing requirements. Therefore, each nonresident partner/shareholder included on the group return is counted as a separate personal income tax return for the purpose of the threshold.
An original return is a tax return required to be filed under Article 22 of the Tax Law that is filed during the calendar year for which that return is required to be filed. You must count original returns to determine if you meet the 100 return threshold and are subject to the income tax e-file mandate.
For the calendar year 2009 e-file mandate, you must count all original individual income and partnership (including IT-204-LL) returns. You are not required to include extensions, amended returns or returns filed for previous years in determining whether or not you meet the 100 return threshold for the income tax e-file mandate.
Please note, the definition of “original return” for the business tax e-file mandate is different than the definition for the income tax e-file mandate. See our FAQs for the e-file business mandate for more information.
An authorized return is any return required by Article 22 of the Tax Law that the Tax Department has authorized to be filed electronically. Article 22 includes personal income tax, fiduciary, partnership and withholding tax.
For returns filed on or after January 1, 2009 the Department has authorized the e-filing of personal income tax and partnership returns, and personal income tax and partnership extensions.
Do I have to e-file Form IT-370 and IT-370-PF (Applications for Automatic Six-Month Extension of Time to File)?
Yes. Extensions that you prepare or file on behalf of your clients must be e-filed if you are subject to the e-file mandate.
What are the payment options on an e-file extension?
If tax software is used to e-file an extension, the only payment option is direct debit.
The bank routing number and account number should be entered into the tax software, and the payment information will be transmitted along with the extension data. The payment can be “post-dated” to a date up to and including the due date of the return. We will only debit the account for the amount authorized.
What are the payment options on an e-file return?
For a personal income tax return, the balance due can be paid with a direct debit, a check mailed in with a payment voucher, or by credit card on our Web-site.
For Form IT-204-LL, direct debit is the only payment option.
To pay with a direct debit, the bank routing number and account number must be entered into the tax software. The account information will be transmitted along with the return data. The payment can be “post-dated” to a date up to and including the due date of the return. We will only debit the account for the amount authorized.
If I e-file an extension for a client, do I have to e-file their tax return?
No. However if you are subject to the e-file mandate, you will need reasonable cause for not e-filing the tax return, and will need to maintain an Opt-out/Reasonable Cause Record for Return Preparers
If I file an extension on paper for a client, can I still e-file their tax return?
Yes. However if you are subject to the e-file mandate, you will need reasonable cause for not e-filing the extension, and will need to maintain an Opt-out/Reasonable Cause Record for Tax Return Preparers.
If I am subject to the e-file mandate, am I required to e-file nonresident and part-year resident income tax returns?
Yes
If I am subject to the e-file mandate, am I required to e-file IT-204-LL returns?
Yes
Do I have to submit an application to e-file NY returns?
No. You don’t have to submit an application to e-file New York State tax returns. To participate in our program you must:
Can tax return preparers opt-out of e-file?
There is no provision in the law that allows a tax return preparer who is subject to the mandate to opt-out. However, if the preparer has reasonable cause for not e-filing a return, and maintains a properly completed Opt-out/Reasonable Cause Record for Return Preparers for that return, the return can be filed on paper.
I am a volunteer return preparer. Am I subject to the mandate?
No. Volunteers who are not compensated for preparing returns are not tax return preparers within the meaning of the law. Therefore, volunteers are not subject to the mandate.
What is the penalty if I don't comply with the mandate?
The law provides for a penalty of $50 for each return that is not e-filed, unless you can establish that the taxpayer opted-out of e-filing, or you have other reasonable cause for not e-filing the return.
What if my client does not want to e-file?
The law includes a provision that allows a client to opt-out of e-file. The client must sign an Opt-out/Reasonable Cause Record for Tax Return Preparers. If it is a joint return, both spouses must sign. If the client(s) opts out of e-filing an extension, and opts out of e-filing the tax return, separate Opt-out/Reasonable Cause Record for Tax Return Preparers are required for the extension and the return.
You must retain the Opt-out/Reasonable Cause Record for Tax Return Preparers in your records for 3 years.
When do I need an Opt-out/Reasonable Cause Record for Tax Return Preparers?
You must have an Opt-out/Reasonable Cause Record for Return Preparers when:
How do I obtain an Opt-out/Reasonable Cause Record for Tax Return Preparers?
An Opt-out/Reasonable Cause Record for Tax Return Preparers may be printed using your tax software, or from the Tax Department Web-site. The Tax Department does not print or mail these forms.
When don’t I need an Opt-out/Reasonable Cause Record for Tax Return Preparers?
You don’t need an Opt-out/Reasonable Cause Record for Tax Return Preparers if you are otherwise complying with the e-file mandate, but your NY approved e-file tax software does not support the e-filing of a tax document. (For example, a credit is claimed on a return and the software does not support the e-filing of the credit form.)
The tax software that I use to prepare individual income tax returns does not support NY e-file for partnership returns. Do I have to buy new software?
Yes. You will need to use tax software that supports both personal income tax and partnership e-file. We are working with the software developers and encouraging them to support all of our e-file programs. Check with your software provider to find out what they plan to support.
The tax software that I use does not support NY e-file. Do I have to buy new software?
Yes. You will need to use tax software that supports both personal income tax and partnership e-file.
How do I find software that supports NY e-file?
You can check our web-site for a list of approved software, or ask your software company if they support New York State personal income tax and partnership e-file.
I have employees who prepare tax returns. How should I count those returns with regard to the threshold?
Returns are counted at the entity level. It is the combined total of the returns prepared by you and your employees that determines whether or not you are subject to the e-file mandate.
My business has multiple locations. Does the threshold apply to each location separately?
No. Returns are counted at the entity level. It is the combined total of the returns prepared at all locations that determines whether or not you are subject to the e-file mandate.
My business is located outside of NYS. Am I still subject to the e-file mandate?
Yes. If you meet the requirements in the law, you are subject to the e-file mandate even though you are located outside of New York State.
My tax software does not support e-file for every authorized tax document. Will I be penalized for not e-filing those returns?
If the tax software that you are using otherwise complies with the mandate, but your software does not support the e-filing of a required attachment (e.g. IT-248 Film Production Credit) you can file the return on paper. You are not required to complete an Opt-out/Reasonable Cause Record for Tax Return Preparers for returns that cannot be e-filed because of unsupported required attachments.
Do I have to enter every transaction on Schedule D for individual income tax returns, or can I use summary statements?
You can include summary statements in the electronically filed return. Since our e-file process is paperless, we do not require you to mail us the supporting details for these transactions when the return is filed. If we need the detailed transaction information, we will request it.
I have multiple transactions to report on an e-filed partnership return. Do I have to enter every transaction, or can I use summary statements?
You must provide the transaction detail for e-filed partnership returns. You can provide the detail by:
Please note that the fact that a return includes multiple transactions will not be considered reasonable cause for not e-filing that return.
Are paper returns with 2-D bar-codes attached considered electronic returns?
No. Returns with a 2-D bar-coded cover sheet are paper returns.
I have not yet received my e-file authorization from the IRS. What should I do?
If you have not yet applied for an e-file authorization from the IRS, you should do so right away. Visit the IRS Web-site for more information on their application process.
How can I get more information on NY e-file?
The e-file information on our Web-site is updated with new information as it becomes available. Please visit it often. We also encourage tax return preparers to sign up for our e-file subscription service.
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Last Modified: December 8, 2008
