New York – E-File Mandates

SALT Report 1156 – The New York Department of Taxation and Finance has issued guidance regarding the upcoming e-file mandates for sales tax, corporate tax, and personal income tax returns.
As of January 1, 2012 tax preparers filing more than five returns a year will be required to e-file all returns.  If a preparer does not e-file a required return the New York Tax Department may impose a $50 penalty on the preparer for each unfiled document and a minimum $25 penalty on the taxpayer for each unfiled document.
Beginning with the sales tax return due March 20, 2012 all sales tax documents for PrompTax, monthly and quarterly filers, must now be filed electronically, and tax preparers will be required to e-file returns for all annual sales tax filers.
Sales tax vendors will be required to e-file if they meet all three of the following conditions:
  • Prepare tax documents themselves, without the assistance of a tax professional;
  • Use a computer to prepare, document or calculate the required filings or related schedules, or are subject to the corporation tax e-file mandate; and
  • Have broadband internet access.

Additional information about the mandate:

  • Applies to tax return preparers located both in and out of New York State.
  • Clients cannot opt-out of e-file.
  • If you have reasonable cause to not e-file, you must maintain adequate documentation and provide that documentation to the state if you or your client receives a penalty bill for failing to e-file.
  • You are responsible for determining whether or not you are subject to the mandate.
  • Once you are subject to the mandate, it continues to apply in all subsequent years, even if you no longer meet the threshold.
  • If you cannot electronically file the return because it’s not supported by approved e-file software or it cannot be filed on our Web site, then you aren’t required to e-file.
  • Preparers cannot charge a separate fee for e-filing a return.