Federal/State Electronic Tax Filing - (2011) e-file


What is E-File?

E-File stands for the Federal/State Electronic Filing Program, a joint program between the Internal Revenue Service ("IRS") and the Delaware Division of Revenue ("DDOR") to provide electronic filing capability of both Federal and State income tax returns in a one-transmission fashion. In essence, the Federal and State returns are "packaged" together and transmitted to the IRS. The State return is stripped from the Federal return by the IRS and forwarded to the State for prompt processing. Both the IRS and the DDOR reply back to the Electronic Filer with an acknowledgment that the returns (Federal and State) have been received accepted. Some exciting features of this program are:

Single data entry. Since both Federal and State returns are packaged together, most information needs to be entered only once to file both returns.

Proof of return receipt and acceptance by both the IRS and the DDOR. Acknowledgements are sent back to the Electronic Filer indicating receipt (a substantial savings over the cost of a registered letter.)

Immediate review of returns for correctness of information. Each is reviewed upon arrival at the IRS for obviously incorrect data (such as incorrect SSNs or mis-matching dollar amounts.)

Convenience by providing taxpayers a one-stop opportunity to file both Federal and State returns.

Quick processing of Federal and State returns meaning refund checks will be back in the hands of taxpayers in record time!

Who Can Participate?

There are three classifications of participants in the electronic filing program: Electronic Return Originators (ERO), Transmitters, and Software Developers.

Preparers and Software companies need not apply to process. If you have been approved by the IRS and have received an EFIN from them, you will be able to electronically file with the State of Delaware. If you become disengaged with the IRS E-File Program, your filing privileges with the State of Delaware will reflect the same status.

Electronic Return Originators (ERO) gather forms from taxpayers and prepare them for electronic transmission using tax preparation software that has been approved by the Division. They may be paid preparers who will fill out the returns for the taxpayers or they may simply be drop-off points for the collection of completed returns which will be processed electronically.

Transmitters actually transmit electronic returns directly to the IRS Service Center, again using software approved by the Division. A company may be both an ERO and a transmitter to use their computer services.

Software Developers create and/or produce the tax preparation and transmission software which formats the electronic returns and allows the data to be transmitted via computers. Software developers must complete rigorous testing with the IRS and the DDOR before their software will be approved for use in creating and/or transmitting Delaware tax returns electronically.

The Application/Acceptance Process

To apply for the federal program you must complete IRS Form 8633, "Application to Participate in the Electronic Filing Program", which is available from the IRS. Federal Publication 1345 specifies the application progress and requirements for federal participation.

The Division reserves the right to deny participation in the program if a company is not registered to do business in the state or has any outstanding tax liabilities with the state. Software Developers, EROs and Transmitters do not have to reapply each year unless federal requirements (as listed in IRS Publication 1345) change or they have been suspended from the program. Software Developers DO have to retest each year.

What Can Be Electronically Transmitted?

The following are the only Delaware state tax forms which can be electronically transmitted:

Form 200-01 Individual Resident Income Tax Return.

Form 200-02 NR, Individual Non-Resident Income Tax Return.

Form 200-03 EZ Individual Resident Income Tax Return (EZ).

As of 2003 Delaware will be accepting the following type of income tax returns. General rules concerning which taxpayers may file electronically are as follows:

1. Residents and Non-Resents of the State of Delaware may file their Delaware returns electronically.

2. Refund, Direct Deposit, Zero-Balance Due and Balance Due returns will be accepted. Balance Due returns must mail their payment prior to the last day to file, but need not remit payment at the time of electronic filing.

What Cannot Be Electronically Transmitted?

In addition to the type of forms which are excluded, the following types of returns cannot be electronically transmitted.

Non-Calendar Year Filers.

Prior Year Returns.

Amended or Corrected Returns.

Returns reporting a Delaware Lump Sum Distribution.

Returns on which the number of exemptions claimed on the State return does not match the number of exemptions claimed on the Federal Return. The only exception to this ruling would be additional exemptions for a taxpayer and/or spouse 60 years of age or over.

Requirements

Electronic filing requires a PC with a modem which gives access to the IRS computer system. Transistors are required to subscribe to the G A C Taxpro, Incorporated, which is used to communicate acknowledgment records back to the transmitter. More specific equipment requirements are listed in IRS Publication 1345.

How Can I Learn More About Electronic Filing?

Delaware has created two handbooks which can be helpful to potential participants in the E-File program:

DE 1345 - Handbook for Electronic Filers of Individual Income Tax Returns, and

DE 1346 - Electronic Return File Specifications and Record Layouts.

Publication DE 1345 outlines the program and requirements in detail for potential Electronic Filers.

Publication DE 1346 outlines the program and provides specifications for potential Software Developers. The DE 1346 can be ordered by contacting Shea Williams through the contact information provided below.

DE 8453 - Delaware Individual Income Tax - Declaration for Electronic Filing
DE 8453OL - Delaware Individual Income Tax - Declaration for On-Line Filing

IRS E-File Specifications
Delaware E-File Specifications

Contact Information:

To speak to a Delaware E-File Representative, call:

James A. Stewart, III
E-File Project Manager
Phone: (302) 577-8170
Email: james.stewart@state.de.us

Shea Williams
E-File Project Assistant
Phone: (302) 577-8223
Email: shea.williams@state.de.us

or write to:

Delaware Division of Revenue
Electronic Filing Program
P.O. Box 8753
Wilmington, DE 19899-8753