RedGearTech Blog

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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