Save Time: E-File Your Federal and State Tax Return Together
Filing Your Federal and State Return Simultaneously in 37 States
Thirty-seven states and the District of Columbia have partnered with the IRS to allow taxpayers to e-file their federal and state tax returns at the same time. This program is known as Federal/State E-file.
How Federal/State E-File Works
When you use Federal/State E-file the electronic filing software puts your federal and state return data in separate packets. These separate packets are then submitted to the IRS at the same time. The IRS acts as a virtual post office for the participating state which retrieves and processes the state return.
How to Use Federal/State E-File
Taxpayers can utilize the federal/state e-file system through a paid tax preparer such as a CPA or enrolled agent that has been accepted as an e-file provider by the IRS and the state. You can also use tax preparation software such as Turbo Tax, H&R Block, or Tax Slayer as well as others to e-file.
Free tax software can also be used to e-file federal and state returns in states that participate in Free File.
If you choose to prepare your own tax return manually using the IRS online forms, you cannot participate in Federal/State E-file. You will be able to e-file, but only your federal tax return.
States That Allow Federal and State E-Filing
These states have made filing state income taxes more convenient by allowing taxpayers to submit their state tax return to the IRS along with their federal tax return:
- District of Columbia
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- West Virginia
Benefits of Filing Simultaneously
The main benefit of filing both your federal and state return together electronically is convenience. Other benefits include:
- Fast Processing: The IRS and participating states can process e-file returns much faster than paper returns.
- Faster Refund: Faster processing means you receive your refund faster, especially if you choose direct deposit.
- More Accurate: Tax preparation software helps to eliminate errors, and the e-file system also has some built-in error detection.
- Proof of Filing: You receive notification when your federal and state returns have been received and accepted.
Drawbacks to Using Federal/State E-file
Federal/State E-file can create some complexities when you have to pay both federal taxes and state taxes with your returns.
The IRS e-file software does not allow you to combine federal and state payments when e-filing. So a separate payment has to be made to the state using normal payment procedures for your state.
In addition, some states do not allow the Federal/State E-file to be used for nonresident and/or part-year resident tax returns.
These drawbacks are mainly minor annoyances and in most instances, the advantages of e-filing outweigh any disadvantages.
Is E-Filing Safe?
Some people may worry about the security of their personal information when e-filing. However, according to the IRS, the federal e-file system has never had a security breach. The IRS uses many security features, such as multiple firewalls, anti-virus features, and encryption to ensure the safety of your personal information.
More information: The IRS has compiled a list of contact information for each state’s e-file coordinator if you would like details on payments and how e-file works in your state.