18322: State e-File Mandates

Following are the state e-file mandates for tax year 2023, as collected from state tax authority publications.

Alabama

Paper returns with 2D barcodes are not considered electronically filed.

An “opt out” election form (Form EOO) must be attached to any paper return submitted by a preparer subject to the electronic filing requirements of Rule 810-27-.09. A 2D barcode is still required on any such paper return.

If an income tax return preparer prepares 11 or more acceptable, original individual income tax returns using tax preparation software in a calendar year, then for that calendar year and for each subsequent calendar year thereafter, all acceptable individual income tax returns prepared by that income tax preparer must be filed using electronic technology, as defined in the “Electronic Tax Return Filing Act,” and as codified in Chapter 30 of Title 40, Code of Alabama 1975.

For 1120, 1120-S, and 1065 returns, if an income tax return preparer prepares 25 or more acceptable, original corporation and partnership income tax returns using tax preparation software in a calendar year, then for that calendar year and for each subsequent calendar year thereafter, all acceptable corporation and partnership income tax returns prepared by that income tax preparer must be filed using electronic technology, as defined in the “Electronic Tax Return Filing Act,” and as codified in Chapter 30 of Title 40, Code of Alabama 1975. This shall cease to apply to an income tax preparer if, during that calendar year and all subsequent years, the income tax preparer prepared no more than 15 original corporation and partnership income tax returns.

Arkansas

A tax practitioner who files a taxpayer’s federal income tax return electronically shall also file the taxpayer’s Arkansas income tax return electronically. The secretary may waive the electronic filing requirement if the secretary determines that filing a taxpayer’s Arkansas income tax return electronically would cause an undue hardship on the tax practitioner.

California

Business returns prepared using a tax preparation program must be electronically filed. This includes original and amended corporation, S corporation, partnership, and Limited Liability Company returns. Business entities may annually request a waiver from this mandate and the Franchise Tax Board may grant a waiver for the following reasons:

• Technology constraints – The tax preparation program is unable to e-file the return due to the complex nature of the return or inadequacy of the program.
• Compliance would result in undue financial burden.
• There are other circumstances that constitute reasonable cause and not willful neglect.

For taxable years beginning on or after January 1, 2017, business returns that do not comply with the mandate (not including businesses that receive a waiver from the Franchise Tax Board) will be subject to a first time penalty of $100 and subsequent penalties of $500. Group returns will be subject to the penalty at the combined reporting group level and not at the member level.

Connecticut

Connecticut agency regulations Section 12-690-1 require tax return preparers who prepared 50 or more CT income tax returns during any calendar year to e-file all CT income tax returns. Preparers may obtain a one-year waiver from the e-file requirement by establishing that they cannot e-file a return without experiencing an “undue hardship” (Regs. Section 12-690-1). This waiver (CT Form DRS-EWVR) can be completed using CT screen EWVR.

The following returns, and their associated payments, must be transmitted electronically for tax years on and after 2015:

• CT-1120, Corporation Business Tax Return
• CT-1065/CT-1120S, Connecticut Composite Income Tax Return
• CT-1041, Connecticut Income Tax Return for Trusts and Estates
• Extensions connected with each package
  
  

Florida

A corporation in Florida must file and pay its income tax electronically if it paid $20,000 or more in tax during the state of Florida’s prior fiscal year (July 1 – June 30). Florida corporate income tax must be reported and filed using Form F-1120 and filed through the IRS’ 1120 Federal/State Electronic Filing Program using approved software.

Taxpayers required to file their federal corporate income tax returns electronically are required to file their Florida corporate income tax returns electronically.

Iowa

Use the following chart to determine if the taxpayer's IA return must be e-filed.

Illinois

A tax return preparer must e-file Illinois individual income tax returns if both of the following are true:

• The preparer files more than 10 Illinois individual income tax returns in a calendar year.
• The preparer is required to e-file federal individual income tax returns.
  
  EXCEPTION: A tax return preparer is not required to e-file a return if the taxpayer directs them not to do so. To document this choice, the taxpayer must complete and sign Form IL-8948, and the tax return preparer must keep it on file for three years. Do not mail Form IL-8948 to the Illinois Department of Revenue unless requested.
  
  

​Indiana

• If a professional preparer files more than 10 individual income tax returns in a calendar year, for the subsequent year the professional preparer must file returns for individuals in an electronic format, as specified by the IN Department of Revenue. A penalty of $50 may be imposed on the professional preparer for each return that is not e-filed. (See exception below.) The maximum penalty is $25,000 per preparer per calendar year.
  
  EXCEPTION: An individual taxpayer may elect to opt-out of having their return e-filed. Form IN-OPT must be completed, signed, and retained on file by the paid preparer. A return filed under these circumstances will not be subject to a penalty for not being e-filed.
  
  
• Pass-through entity returns (S corporations, partnerships, and fiduciaries) with more than 24 Indiana Schedules K-1 must be filed electronically.
• The State of Indiana does not allow returns containing the following forms to be e-filed:
  • Amended Form IT-40, IT-40PNR, or IT-40RNR
  • Form SC-40, Unified Tax Credit for the Elderly
    
    

Kansas

Preparers who file 50 or more returns per year are required to file at least 90% of their returns electronically. The requirement applies to any paid preparer who prepares 50 or more individual income tax returns during any calendar year. The combined total of the returns prepared by all employees at all of the tax preparer’s locations will be used to determine whether or not the tax preparer is subject to the e-filing mandate. Once a tax preparer meets the 50 or more individual income tax return threshold for any calendar year, the e-file requirement also applies to all future years in which the preparer prepares KS individual income tax returns.

The Kansas DOR Secretary may waive the e-file requirement if it is determined that complying with the requirement would cause undue hardship.

Kentucky

Tax return preparers who file 10 or more individual income tax returns are required to e-file their clients' returns. There are some exceptions to the mandate, such as Form 8948-K, which is used to explain why a particular return is being filed by paper. The form should be attached to and mailed with the paper return.

The ERO must retain Form 8879-K. (Form 8879-K is not required for federal or state e-filed returns with federal PIN.) Acceptance into the Kentucky e-file program is automatic with acceptance into the federal e-file program.

Louisiana

Any tax return preparer who prepares more than 100 LA individual income tax returns during any calendar year must file them electronically. For individual income tax returns due on or after January 1, 2012, 90% of the authorized returns must be e-filed. Every corporation that files a LA Corporation Franchise Tax Return must e-file the return with the Department of Revenue using the electronic format prescribed by the department as follows:

• For tax periods beginning on or after January 1, 2020, every corporation with total assets that have an absolute value equal to or greater than $250,000 (total assets with a value equal to or greater than $250,000 or with a value equal to or less than $250,000) shall e-file the return.
• For tax periods with a beginning date of January 1, 2019 – December 31, 2019, every corporation with total assets that have an absolute value equal to or greater than $500,000 (total assets with a value equal to or greater than $500,000 or with a value equal to or less than $500,000) shall e-file the return.

Every partnership that files a LA partnership tax return for tax periods beginning on or after January 1, 2018, except for those partnerships filing composite partnership returns, must e-file the return with the DOR using the electronic format if the partnership's total assets have an absolute value equal to or greater than $500,000 (total assets with a value equal to or greater than $500,000 or with a value equal to or less than $500,000).

Every fiduciary that files a LA fiduciary income tax return must e-file the return with the DOR using the format prescribed by the department as follows:

• For tax periods beginning on or after January 1, 2020, every fiduciary that files a LA fiduciary income tax return with one or more Schedules K-1 attached for taxable years beginning on or after January 1, 2020 must e-file the return. 
• For tax periods with a beginning date of January 1, 2019 – December 31, 2019, every fiduciary that files a LA fiduciary income tax return with more than 10 Schedules K-1 attached must e-file the return.

NOTE: Fiduciaries required to e-file may not send paper versions of any forms to be included as part of their return

Maine

Tax return preparers must file by electronic data submission all original ME tax returns for individual income tax, or for entities required to file Form 1120ME with total assets of $5 million or more, that are eligible for electronic filing, except:

• When for the previous calendar year, the tax return preparer prepared 10 or fewer original Maine tax returns for individual income tax that are eligible for e-file
• When the taxpayer refuses to allow the return to be e-filed and the tax return preparer notes the refusal in the taxpayer’s records
• When the taxpayer has been granted a waiver from mandatory participation under section .08 of Rule 104.

Failure to comply may result in a penalty, as provided in 36 M.R.S. § 187-B (5-B).

Maryland

A preparer who has prepared more than 100 qualified returns in the prior taxable year is required to file the returns electronically. Maryland House Bill 810 authorizes the Comptroller to impose on a preparer a $50 penalty for each return that is not filed electronically in compliance with this act, unless the preparer is able to show that the failure to comply is due to reasonable cause and not due to willful neglect. The total penalties assessed may not exceed $500 for all returns filed by the preparer in a taxable year. Waivers are available (Tax-General Article §10-824).

Massachusetts

All corporation, S corporation, and partnership returns (both original and amended) must be e-filed, and all payments must be made electronically:

NOTE: Corporations exempt from taxation under section 501 of the Internal Revenue Code reporting unrelated business taxable income of $100,000 or more on Form M-990T must e-file all original and amended returns. Extension payments of $5,000 or more must be made electronically. All future returns (both original and amended) from this corporation must be e-filed, and all payments must be made electronically.

Individual Returns

Personal income tax preparers must e-file all Massachusetts personal income tax returns (Forms 1 and 1-NR/PY) unless the preparer reasonably expects to file 10 or fewer original Massachusetts Forms 1 and 1-NR/PY during the calendar year or the taxpayer directs that filing be done on paper. Individual extension payments of $5,000 or more must be made electronically.

Fiduciary Returns

Fiduciary preparers must e-file all Massachusetts fiduciary tax returns (Forms 2 and 2G) unless the preparer reasonably expects to file 10 or fewer original Massachusetts Forms 2 and 2G during the calendar year. All fiduciary payments of $2,500 or more must be made electronically.

Other Returns

Trusts and unincorporated associations exempt from taxation under section 501 of the Internal Revenue Code reporting unrelated business taxable income of $100,000 or more must e-file all original and amended returns, and all payments must be made electronically.

Pass-through entities meeting either of the following criteria must e-file all original and amended returns and make extension payments electronically:

• The pass-through entity has members other than resident individuals or has members receiving distributive shares for which withholding or estimated taxes have been paid.
• The pass-through entity is electing to pay the excise under G.L. c. 63D.

Michigan

​​To optimize operational efficiency and improve customer service, the Michigan Department of Treasury has mandated e-file of individual income tax returns.

The IRS mandates preparers filing 11 or more income tax returns to e-file those returns, with minor exceptions. Michigan would expect any preparer e-filing federal returns to also e-file Michigan returns. This mandate also applies to City of Detroit returns.

The MI Department of Treasury will be enforcing the e-file mandate for CIT. The enforcement includes not processing computer-generated paper returns that are eligible to be e-filed. A notice will be mailed to the taxpayer, indicating that the taxpayer’s return was not filed in the proper form, and content, and must be e-filed. Payment received with a paper return will be processed and credited to the taxpayer’s account even when the return is not processed.

Mississippi

All corporation or pass-through entity returns with assets greater than $250,000 are required to electronically file the return. Failure to comply with the electronic filing requirement could result in a penalty of $25 for the first instance of noncompliance and $500 for each additional instance of noncompliance. If the preparer is unable to comply with this mandate, contact the e-File Coordinator at (601) 923-7582.

Minnesota

Preparers who filed more than 10 MN returns last year are required to e-file all MN returns, unless the taxpayer indicates otherwise. This requirement also applies to preparers in other states. The requirement does not include returns prepared for Homestead Credit refunds, renter’s property tax refunds, amended income tax returns, or returns filed with other states. If the taxpayer does not want the preparer to e-file the return, mark the appropriate E-file Opt Out option on MN screen M1.

The state imposes a $5 per tax return penalty on the tax return preparer (who falls under the mandate) for any return not e-filed. This is true even if the taxpayer indicates they do not want the return e-filed.

For more information, see the MN Department of Revenue website.

Montana

Montana law (MCA 15-30-3315) requires partnerships with more than 100 partners to file electronically.

Montana law (MCA 15-1-802) requires payments of $500,000 or more to be made electronically.

All corporations with more than $750,000 in gross receipts during the tax period must file electronically. By filing electronically, a corporation represents that it will retain the documents required to substantiate its tax returns and will provide them upon the department’s request. Submitting a hard copy of Form CIT is not required unless requested.

Nebraska

Any person or business paid to prepare and file more than 25 NE individual income tax returns in the prior year must e-file all individual income tax returns they are paid to prepare in the current year. Penalties could apply to tax professionals who do not e-file returns as required. Additional tax programs may also be integrated into the e-file mandate at the Tax Commissioner’s discretion. For questions, contact the NE Department of Revenue. A copy of the statute is also available at Neb. Rev. Stat. § 77-1784.

New Jersey

Practitioners who prepared 11 or more NJ resident income tax returns must file their clients’ returns via one of the state’s three e-filing services. An e-File Opt-Out Request Form (Form NJ-1040-O) is available for taxpayers who choose not to have their returns e-filed by a tax practitioner.

For tax years beginning on or after January 1, 2016, all corporation business tax returns and payments must be submitted electronically. This mandate includes all returns, estimated payments, extensions, and vouchers.

New Mexico

PIT returns must be e-filed by preparers who file more than 25 returns. Taxpayers can opt out in writing; there is a penalty of $5 per return for noncompliance.

Oil and Gas taxpayers who have more than 150 lines of data are required to e-file.

A pass-through entity with 51 or more NM payees is required to e-file their return and e-pay electronically. Pass-through entities with 50 or fewer payees can paper-file. If a pass-through entity has 51 or more NM beneficiaries who receive NM taxable net income, the estate or trust is required to e-file Schedule FID-D.

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New York

Tax return preparers and their firms must e-file all authorized tax documents if they both prepared at least one authorized tax document for more than 10 different taxpayers during calendar year 2022 and either:

• Will use tax preparation software to prepare one or more tax documents in 2023 (If the document cannot be e-filed, the preparer does not have to count it to determine if they meet the “more than 10 different taxpayers” threshold.)
• Were previously mandated to e-file returns (Once the preparer is subject to the mandate, they must e-file returns for all subsequent years, even if they no longer meet the requirements.)

New York State accepts e-filed returns for tax years 2020, 2021, 2022, and 2023. Tax year 2020 returns fall under the mandate processing year in 2023. The mandate applies to tax return preparers and their firms located within and outside New York State. Clients of tax return preparers cannot opt out of e-file. Tax return preparers who do not comply with the e-file mandate may be subject to a $50 per document penalty. Once a tax return preparer or their firm is subject to the mandate, the mandate continues to apply to them in all following years, even if that tax return preparer or the firm no longer meets the threshold. A tax return preparer may have been initially subject to the e-file mandate because they prepared more than five New York State tax documents in 2019. Tax return preparers who do not comply may be subject to a $500 penalty for the first-time charge, and a $1,000 penalty per subsequent charge.

New York State law prohibits software companies from charging an additional e-file fee.

New York City

Tax return preparers and their firms must e-file all authorized tax documents if they both:

• Prepared more than 100 authorized tax documents in, or prior to, calendar year 2023
• Used tax preparation software to prepare one or more corporation tax document in calendar year 2023 or earlier

NYC accepts e-filed returns for tax years 2021, 2022, and 2023. Tax return preparers who meet the mandated criteria cannot opt out of the e-file mandate. Clients of tax return preparers wishing to opt out of e-filing their taxes must apply for a hardship waiver. Visit the New York City Department of Finance website for more information.

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North Dakota

North Dakota House Bill 1082 requires all pass-through entities (fiduciaries, partnerships, and S corporations) with 10 or more owners to file and pay electronically. This requirement applies to both original and amended returns.

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Ohio

Preparers who file more than 11 original tax returns during any calendar year must use electronic technology to file their clients’ OH personal income tax returns. This mandate does not apply to a preparer who prepared 10 or fewer returns in the previous calendar year. A tax return preparer is defined as any person who operated a business that prepares, or directly or indirectly employs another person to prepare for a taxpayer, an original tax return in exchange for compensation or remuneration from the taxpayer or the taxpayer’s related member.  Although this mandate applies to all original tax returns, the department is enforcing the mandate only on the personal income tax, sales tax, commercial activities tax (CAT), and employer withholding tax (above certain limits) returns.

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Oklahoma

Any specified tax return preparer shall file all individual income tax returns prepared by such preparers by electronic means. The term “specified tax return preparer” shall have the same meaning as provided in section 6011 of the Internal Revenue Code of 1986, as amended. The preparation of a substantial part of a return or claim of refund is treated as if it were the preparation of the entire return or claim of refund. This applies to all returns filed after December 31, 2010.

Oregon

• Individual Returns – Paid preparers who meet the requirements of the federal e-file mandate—who anticipate preparing 11 or more federal individual or trust tax returns during the year—must e-file Oregon personal income tax returns. Form 8948, Preparer Explanation for Not Filing Electronically, is used to explain why a particular return is being paper filed.
• Business Returns – If a corporation is required to e-file its federal return, then the corporation is also required to e-file the Oregon return. If e-file was required for the original return, then any amended returns for that year must also be e-filed. If, however, that year is not open for e-file, the return should be paper filed.
  
  

Pennsylvania

• Individual Returns – Any third-party preparer who submitted at least 11 PA-40 Pennsylvania Personal Income Tax Returns or amended PA-40 Pennsylvania Personal Income Tax Returns for any taxable year shall be required to e-file for each subsequent year in the manner prescribed by Departmental instructions. PA-41, PA-40 NRC, and PA-40 KOZ returns are not subject to this mandate.
• Corporation Returns – Act 72 of 2013 requires electronic filing by third-party preparers who annually submit 11 or more state tax reports or returns. Act 72 of 2013 authorizes the DOR to mandate that payments of $1,000 or more for corporation taxes, employer withholding, and sales tax must be made electronically effective January 1, 2014. Any third-party preparer who submitted at least 11 RCT-101 Corporate Net Income Tax Reports for any taxable year shall be required to e-file all PA corporate tax reports each subsequent year in the manner prescribed by Departmental instructions. Corporations completing their own RCT-101 are not subject to this mandate.
• S Corporation and Partnership Returns – Any third-party preparer who submitted at least 11 PA-20/PA-65 S Corporation/Partnership Information Returns for any taxable year shall be required to e-file all PA-20S and PA-65 returns each subsequent year in the manner prescribed by Departmental instructions. Mandatory e-filing is also required each subsequent year for any third-party preparer who submitted at least 11 Directory of Corporate Partners Returns (Form PA-65 Corp) for any taxable year; additionally, all associated schedules (including Federal Form 1065 and Schedule K-1) and attachments must be e-filed as well.
  
  

Rhode Island

Any paid preparer who filed more than 100 RI tax returns during the previous calendar year must e-file all eligible tax returns. A person employed by a paid preparer with multiple offices is required to e-file if the total of all tax returns filed from all offices is more than 100, regardless of whether a single office of the same preparer files fewer than 100 returns. If a paid preparer fails to abide by the e-file mandate, or otherwise causes clients’ RI tax returns to be filed falsely or improperly, the Tax Administrator may, after a hearing to show cause, preclude such preparer from preparing and filing RI tax returns with the Tax Division (Regulation ELF 09-01).

South Carolina

Individual Returns

Any preparer who prepares 100 or more returns for a tax period for the same year is required to submit those returns electronically where electronic means are available. Where electronic means are not available to file the return, but 2D barcode is available, the preparer must use 2D barcode. This number includes any SC tax return that is prepared, regardless of tax type. If compliance with this section is a substantial financial hardship, a tax return preparer may apply in writing to the department to be exempted from these requirements. The address is:

Electronic Filing Mandate Exemption Application
PO Box 125
Columbia, SC 29214

The department may grant an exemption for no more than one year at a time. A person who fails to comply with the provisions of this section may be penalized in an amount to be assessed by the department equal to $50 for each return.

Business Returns

South Carolina corporation, partnership, and fiduciary filers are required to e-file and electronically pay the balance on such returns if their SC tax liability is $15,000 or more per filing period.

Tennessee

All filings of and payments related to franchise and excise tax returns (Form FAE170) must be made electronically.

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Texas

No Tax Due Reports must be filed electronically beginning January 1, 2016.

Utah

Tax preparers that file more than 101 income tax returns in a calendar year are required to file all such returns using scan technology or by electronic means. The filing requirement will not apply if:

• A schedule must be attached to the return that cannot be filed using scan technology or electronic means.
• The taxpayer requests in writing that the income tax preparer not file the return using scan technology or electronic means.
• The Utah Tax Commission waives the requirement that a return be filed by scan technology or electronic means. A tax preparer may obtain such a waiver from the commission by demonstrating that the use of scan technology or electronic means would result in an undue hardship.

The filing requirement does not apply to amended returns or returns for any taxable year that begins before the first day of the current taxable year. If a preparer or multiple preparers affiliated with the same establishment prepared 101 or more returns in the prior calendar year, they must submit all UT individual tax returns electronically.

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Vermont

Effective January 1, 2020, all preparers of individual income taxes who prepare more than 25 returns per year are required to e-file all individual income tax returns.

Effective January 1, 2016, all preparers of corporation, business, and fiduciary income tax returns who prepare more than 25 returns per year are required to e-file said returns.

The director of the Division of Taxpayer Services will consider a written request for an exemption based on extraordinary circumstances.

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Virginia

Individual Income Tax

Paid tax return preparers who prepare or employ people to prepare 50 or more individual income tax returns a year are required to e-file. If they prepare 50 or more returns in a taxable year, then for each year after, they must file all individual income tax returns electronically.

Effective for payments made on or after July 1, 2022, individuals must submit all income tax payments electronically if any payment exceeds $1,500 or the sum of all payments is expected to exceed $6,000. This includes estimated, extension, and return payments. VA has issued letters to taxpayers who may meet this criteria, making them aware of the requirement. Do not mail vouchers with payments exceeding the aforementioned thresholds.

Fiduciary Income Tax

Beginning with returns due on or after January 1, 2020, tax return preparers are required to e-file all fiduciary income tax returns, but there is no requirement to make payments electronically.

Waivers

Taxpayers may request a temporary waiver by submitting an Electronic Filing Waiver Request, citing their specific hardship. All waivers are temporary and must be renewed annually.

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Washington

Form 14 0001, Working Families Tax Credit Application, must be e-filed.

West Virginia

Income tax preparers who file more than 25 personal income tax returns, and will be using a tax preparation program to complete one or more of these returns, must e-file them for the current tax year. Tax return preparers may opt out of the e-file provision by filing a hardship waiver request application and clearly demonstrating the nature of the hardship. In the absence of an approved hardship waiver, a tax return preparer required to e-file is liable for a penalty of $25 for each return not filed electronically; however, if a taxpayer receiving services from a tax return preparer who is required to file all WV income tax returns electronically elects (opts out) of having their return electronically filed, they must complete and sign Form OPT-1. The penalty of $25 still applies.

Taxpayers making more than $10,000 in payments for a single business tax type must e-file all returns. Taxpayers making more than $10,000 in payments for a single business tax type, or a $100,000 payment for personal tax during the previous fiscal year, must e-file all returns and make payments electronically (unless specifically excluded).

​Wisconsin

If a tax return preparer prepared 50 or more 2022 Wisconsin individual income tax returns in 2023, they are required to e-file all 2023 Wisconsin individual income tax returns. Wisconsin Administrative Code Section Tax 2.08 gives the department authorization to require electronic filing of individual income tax returns.

The administrative rule requiring the electronic filing of individual income tax returns applies to any person or entity engaged in the business of individual income tax return preparation, regardless of its legal form; thus, it applies to sole proprietors, partnerships, limited liability companies, and corporations that prepare 50 or more Wisconsin individual income tax returns.

e-File is required for individual Forms 1CNS, 1CNP, and PW-1 for tax year 2023 (due in 2024).

e-File is required for business Forms 3, 4, 5S, and 6. Waivers are granted on a limited basis.

Payments greater than $1,000 must be made electronically.