December 30, 2019

New York E-File Mandate

peter alizio calendar icon at 4:21 PM
I just received the following email from the New York State Department of Taxation and Finance reminding me that tax preparers are required by law to e-file all New York State personal income tax returns prepared. This e-file mandate is not new but currently, the e-filing system is down for maintenance (since November)  forcing tax preparers to either paper file a tax return or wait until the system is back up sometime in January. 


The NYS Tax Return Preparer E-File Mandate


Tax return preparers who previously prepared 10 or more tax returns in the previous year are now mandated to use tax software and electronically file tax returns. Additionally, tax preparers may not charge a separate fee for e-filing, and clients cannot opt-out of e-filing.

Tax Preparer Penalties for failure to comply with the E-File Mandate 


(1)  A $50 penalty per tax document not e-filed unless the tax preparer can document reasonable cause for not e-filing. 

(2)  A $500 penalty imposed on tax preparers charging clients a separate e-filing fee (first time) and $1,000 penalty for each subsequent charge.

I like e-filing as it makes things easier for both NYS and the tax preparer.  However, there will always be times when it is necessary to paper file specifically past due tax returns.