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Need to Know about IRS Combined Federal/State (CF/SF) 1099 Filing

There are a few number of selected states that allows the IRS to transmit the 1099 information automatically to them once it is been filed. This service is available only with the electronic filing method. Electronic filing is not simple as emailing to the IRS, it requires the certain process to be completed. Initially, you need to apply and become approved by the IRS to submit the forms to the FIRE system.

Who can do combined federal and state filing?

Those companies, which expect to file electronically in single or multiple states must consider participating in the program.

What is required to participate in the program?

When you reported certain information to the states in the combined filing, the same information will be carried out when you report to the IRS. When you are filing combined, the IRS simply forwards the information to the state, it saves time for you and the state tax agency. But you are required to format it based on the IRS specifications and use the special code of the state.

When you are filing 1099 form for the same payee in multiple states, you need to create the B record for each state in electronic format. You also need to specify how much amount you paid to the recipient in each state. You cannot just report the total amount to each state. For instance, when a contractor worked between two states, you just need to divide how much amount was paid to the independent contractor when they worked in both the state.

The IRS notes “some participating states need separate notification, which the taxpayer is filing in that manner. The IRS acts just as a forwarding agent. The taxpayers must take the responsibility to contact the appropriate state for the information.”

How to check whether my state participate?

Check with the tax collection agency of your state in order to better understand the information withholding and reporting obligations. Check about the states that participate in the program.

States that participate in the program:

These following states allow the taxpayer to file combined:

  1. Alabama
  2. Arizona
  3. Arkansas
  4. California
  5. Colorado
  6. Connecticut
  7. Delaware
  8. Georgia
  9. Hawaii
  10. Idaho
  11. Indiana
  12. Kansas
  13. Louisiana
  14. Maine
  15. Maryland
  16. Massachusetts
  17. Michigan
  18. Minnesota
  19. Mississippi
  20. Missouri
  21. Montana
  22. Nebraska
  23. New Jersey
  24. New Mexico
  25. North Carolina
  26. North Dakota
  27. Ohio
  28. South Carolina
  29. Vermont
  30. Virginia
  31. Wisconsin

These 31 states participate in the combined filing. Hence make use of this program when your company is required to file in multiple states at the same time.

By admin

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