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1. What is the electronic filing requirement for Ohio income tax preparers?
A tax return preparer that prepares more than seventy-five original tax returns during any calendar year that begins on or after January 1, 2008, shall, beginning January 1, 2010, use electronic technology to file with the tax commissioner all original tax returns prepared by the tax return preparer. This division does not apply to a tax return preparer for a calendar year if, during the previous calendar year, the tax return preparer prepared no more than twenty-five original tax returns.
A tax return preparer is defined as any person that operates a business that prepares, or directly or indirectly employs another person to prepare, for a taxpayer an original tax return in exchange for compensation or remuneration from the taxpayer or the taxpayer’s related member.
2. Why did Ohio decide to require tax preparers to file electronically?
The primary reason for the requirement is to control the costs associated with processing income tax returns. The Department of Taxation estimates that it saves more than $1 for each return filed electronically rather than from pen and paper.
Electronic filing also offers several practical advantages to taxpayers and preparers. Returns submitted electronically are more accurate and allow for faster, more efficient processing procedures and quicker refunds. Electronic returns also facilitate more rapid comparisons between the federal, state and school district returns that minimize discrepancies.
3. What is the basis for this filing requirement?
The filing requirement, found in section 5747.082 of the Ohio Revised Code, was enacted by the 127th General Assembly through House Bill 562.
4. Do the 25- and 75-return thresholds associated with the electronic filing requirement refer to all returns filed during a given calendar year or just the returns that were filed electronically?
The threshold is based on the number of personal income tax returns filed by your company, whether it is an electronic or a paper return.
5. When does the requirement begin?
The electronic filing requirement for income tax preparers begins with returns filed on or after Jan. 1, 2010, for taxable year 2009 and subsequent years.
6. Who is exempt from filing electronically? To which documents does the requirement apply?
The mandate applies to personal income tax returns, IT 1040 and IT 1040EZ. The requirement does not apply if you meet any of the following condtions:
7. Is there a way for the paid preparer to "opt out" of the Ohio electronic filing requirement?
Yes. A paid preparer may complete the IT EF opt out form to request exclusion from the electronic filing mandate. The requests will be reviewed and approved or denied on a case by case basis.
8. What type of reasons will be accepted for the tax preparer opt out form?
Preparers seeking to opt out of electronic filing must present strongly compelling reasons to justify the waiver of the requirement. Preparers filing tax returns with the state of Ohio should plan to comply with the electronic filing mandate, and not assume that their request to opt out will be granted.
The department's view is that there are very few reasons why a return cannot be submitted electronically. Preparers who intend to file state income tax returns for Ohio must comply with the electronic filing mandate.
9. What if my client(s) object to filing their tax return electronically?
The taxpayer waiver is provided for taxpayers that do not want their tax return to be filed electronically.
The taxpayer must attach the completed and signed IT Waiver to their Ohio form IT 1040 or IT 1040EZ.. The taxpayer must complete and sign the waiver each year.
10. May practitioners complete the waiver?
Yes, the paid preparer may complete a waiver for a taxpayer who requests to opt out of the federal/state e-file program. The waiver must be completed in its entirety and include the taxpayer(s) signature(s).
11. Are there penalties if I do not file electronically?
A $50 penalty will be imposed for each paper return filed, starting with return number 76. However, in an effort to give preparers enough time to troubleshoot any electronic filing problems, the department will not penalize any preparer the first year.
12. What happens if I don't pay the penalty for not filing electronically?
The state will issue an assessment for any payment owed to the state, but not paid. Payments that are not received during the assessment phase will be certified to the Attorney General’s office for collection.
13. What software do you recommend?
The department cannot recommend a particular software company. All approved software is tested before the beginning of the tax season and all such approved software meets the business and formatting requirements of an electronic return.
A complete list of approved software products appears on our Web site at software developers.
14. How do I select a software product?
Tax preparers should ask the following questions before selecting a software company:
15. As a preparer, do I have to submit any tests to the Ohio Department of Taxation?
Preparers do not have to submit any tests to the department before submitting returns electronically.
16. Do I have to register to file electronically in Ohio?
If you are registered to e-file with the IRS you are automatically registered with Ohio. We do not require a copy of the IRS acceptance letter or IRS form 8633. Our only requirement is that you use software that has been approved by Ohio.
17. Do I have to use the federal/state e-file program or can I use the I-File or eForms systems offered by the Ohio Department of Taxation?
You do not have to use the federal/state e-file program. Instead, you may use one of Ohio's Web-based alternatives such as I-File or eForms. However, preparers who use the Ohio Web-based alternatives may miss some of the consistency checks provided through the federal/state e-file program. The combined program allows federal and state taxing authorities to compare certain line items such as the federal adjusted gross income, number of exemptions, etc. These checks reduce errors.
18. What type of hardware/software do I need to file electronically?
The hardware you need in order to file electronically is identified in the software you purchase. Different products require certain operating systems, memory capacity and modem connections.
19. Who do I contact if I have questions about the electronic filing program?
You may contact the Ohio Department of Taxation's electronic filing help desk at (614) 466-0197 for questions regarding the federal/state e-file program or any of Ohio’s electronic filing alternatives.
20. Who do I contact if I have questions about my software or acknowledgements?
Contact your software help desk for specific questions regarding your software or missing acknowledgements.
21. Where can I find more information about the Ohio electronic filing program?
Preparers will find additional information in the Practitioner Electronic Filing Booklet.
22. What are some of the common problems that can be experienced when filing electronically?
Some of the common difficulties include:
