1040 E-file: Appendix E - State E-file

Supported States

Please see the 1040 State E-file Information Guide for a list of the supported states.

Introduction to the State E-file Program

E-file will accept two types of submissions:

Linked Returns: The federal return must be accepted before the state return is passed on to the state taxing authority.
Unlinked Returns: The state return is not linked to the federal return. If the return passes a limited check, the state return will be forwarded to the state.

It is possible for the state return to be accepted before the federal return is accepted. You must take care if the federal return is materially changed to get it accepted by the IRS, because the federal return filed with the IRS would no longer be the same as the federal return filed with the state. If this happens, an amended state return may be needed.

Attaching the Federal Return

Federal Return Information Included in State Submission

Most states require that a copy of the federal return is submitted along with the state return. The IRS does not forward its copy of the return to the states, but instead a separate copy of the federal return is created and included in the state submission.

The state rules for including the federal return are not uniform. We have studied these rules, and the 1040 program will automatically create the required federal information and include it with the state submission. The federal return will always be transmitted with California returns.

Federal PDF attachments are included in the copy of the federal return submitted with the state return for all state returns except for Massachusetts, New York IT-204-LL (filing fee payment form), Minnesota M1PR (property tax refund), and state extensions.

PDF Attachments

Some states allow you to attach additional information to the state submission. Most states require that this information be in a PDF format, and some states will allow this information to be in a different format. Since forms allowed and file format varies by state, this information is available in each state’s E-file Organizers.

If your state allows you to attach files that are in a format other than PDF, follow the steps in your state’s E-file Organizers.

Overview of State E-file

Components of the State Submission

The state e-filing submission consists of separate XML files for the state and federal returns and federal and/or state PDF files if allowed. How these files are assembled determines if the state return is linked to the federal return or is unlinked, this may have significance for return approval.

A: Federal XML File (AXXXXXXY.XML)

+

B: State XML File (AXXXXXXY,X??)

=

C: State Submission (State Package of XML Files and PDF Files)

A. Federal XML File

Each state requires a copy of the federal return. The federal copy will be the complete federal return and any federal PDF attachments. The state systems have studied these requirements and will automatically use the appropriate files. The federal return file will have an XML file extension.

B. State XML File

The state XML file contains the state return. The state XML file will have a file extension of “X” plus the postal code abbreviation of that state.

C. State Submission

The state submission will include the federal XML file plus any allowed PDF attachments and the state XML file plus any allowed PDF attachments.

Taxing Authority’s Workflow for E-file

All state returns are transmitted to the federal e-file system before they are forwarded to the state taxing authority.

Thomson Reuters transmits the return to federal e-file (IRS).
The IRS performs checks on the submission.

If valid, the IRS makes the state return available to the state taxing authority.

If not valid, the IRS rejects the return.
The state retrieves the return from the IRS and sends a receipt for state submission to the IRS.
The state processes the return and sends a state acknowledgment to the IRS.
Thomson Reuters retrieves the acknowledgment from the IRS and makes it available to you.

Additional Considerations for E-file

Each state offering e-file will have its own specific requirements that are reviewed before we can determine whether a return is eligible for e-file. Following is a short list of what is considered for each state:

Business rules and other error checking rules
Forms and schedules required or excluded from XML
Forms, schedules, and other information accepted as PDF attachments
Rules for the inclusion of the federal return
Signature requirements
Payment methods.

How to E-file

These procedures are required for state e-file.

Complete the federal and state returns and clear diagnostics.
Decide if you will submit your return as linked or unlinked.
Create the electronic return. The e-file has now been created and submitted to Thomson Reuters for transmission to the federal e-file system (IRS).
Monitor the acceptance / rejection status.
Modify and resubmit rejected returns.
Retain acknowledgment records and signature documents as required by your states.

Linked vs. Unlinked Filing

E-file accepts two types of state submissions: Linked and Unlinked. No matter which type you choose, all state returns are transmitted to the federal e-file system before they are forwarded to the state taxing authority.

The decision to link or unlink the federal and state returns is made when the e-file batch is created and sent to Thomson Reuters.

Linked Submission

The state return is linked to a federal return by including the federal return’s submission ID inside the state return. This type of submission is also referred to as a federal / state submission.

When linked returns are transmitted, we will first transmit the federal return to the IRS and we will hold the state return until the federal return is accepted or rejected.

If the federal return is rejected, the state return is also rejected and acknowledgments rejecting both returns are sent to the transmitter.
If the federal return is accepted, we will transmit the state return to the IRS and the IRS’s e-file program will perform minimal validation checks before passing it along to the state taxing authority for processing. The state return can still be rejected at this point if it fails the IRS’s minimal validation checks or if the state rejects the return.

Unlinked Submission

If the federal and state returns are not linked, the state return does not contain the federal return’s submission ID and we do not hold it until the federal return is accepted. The IRS’s e-file system will perform minimal validation checks on the state submission before it is forwarded to the state taxing authority.

The state return can still be rejected if it fails the minimal validation checks or if the state rejects the return.

It is possible for the state return to be accepted before the federal return is accepted. You must take care if the federal return is materially changed to get it accepted by the IRS, because the federal return filed with the IRS would no longer be the same as the federal return filed with the state. If this occurs, an amended state return may be needed.

This type of submission is also referred to as a state only submission.

Linked vs. Unlinked Submission

The decision to link or unlink the federal and state returns is made when the e-file batch is created and is sent to Thomson Reuters.

Creating a Linked Submission

To link a locator’s federal and state returns, you must submit both the federal and state return to Thomson Reuters.

Create the e-file. You are now in the RS Browser and you are ready to pick the returns to submit.
Select both the Federal ready to send and State ready to send boxes.
Click Continue to view the federal and state returns.
Mark the Select column for the locator’s federal return, and mark that locator’s state returns you wish to link to that federal return.
If a state return is submitted using this method without also submitting the federal return (either at the same time or at a previous time), the return will be rejected. To submit only the state e-file, use the Unlinked submission method below.

Creating an Unlinked Submission

To create an unlinked submission, you will submit only the state return to Thomson Reuters. Do not select the locator’s federal return. You may submit the federal return any time after you submit the state return. You cannot submit it at the same time the state unlinked submission is created.

Create the e-file. You are now in the RS Browser and you are ready to pick the returns to submit.
Select the State ready to send box.
Click Continue to view the state returns.
Mark the Select column for the state returns you wish to submit as an unlinked submission.

E-file/1040_ef_app_e_state_ef.htm/TY2020

Last Modified: 08/13/2020

Last System Build: 09/13/2021