1099 Express supports the Combined Federal/State Filing Program. Under this program the IRS acts as a forwarding agent to most states that have an income tax. The 1099 information is delivered to the "participating states", as a convenience to the Filer. This program saves you the time and trouble of having to file your 1099s to those participating states. Separate reporting to those states is not required (see IRS Pub. 1220, Part A, Section 12).

Only the following forms may be filed under the State Filing Program:

Forms 1099-B, 1099-DIV, 1099-G, 1099-INT, 1099-K, 1099-Misc, 1099-NEC, 1099-OID, 1099-PATR, 1099-R, 5498-IRA

Some states which have an income tax, may not participate, and thus not allow the IRS to forward information returns. For example, New York has a state income tax, but will not accept 1099s forwarded from the IRS.

Only the following 30 states allow the IRS to forward 1099s:

Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Indiana, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, Wisconsin

How to Participate in the Combined Federal/State Filing Program

To participate, you must submit a test file to the IRS over the internet between November 1 and February 15th. If your test file is approved with the "Good" status by the IRS, you will be automatically enrolled in the the program. The IRS will notify you of your acceptance into the program. Form 6847 is no longer used. Here are the detailed instructions for sending a test file to the IRS:

1. Create a 1099-Misc file with about 20 dummy or real records. Make sure about half of the people in the file have addresses in an assortment of the participating states listed above. You may use ABC_Corp_1099_Misc_Example.src in the C:\E200x folder as your test file.

2. Click on the Options/Filer Information Menu. Fill in your correct Filer/Company information. On the Special Tab check the box labeled "Filing both Federal and State". Click on the Options/TCC Holder Menu and enter your REAL TCC number and the TCC Holder Information. For more about the Filer and TCC Holder click here. Save the file.

3. It is no longer necessary to populate the CS column with the Edit/Insert Combined States Menu. Populate the CS column only when the state code of payees address is not where the payee lives.

4. Click on the Edit/Insert Account Numbers Menu. This will insert account numbers if they are missing. Account numbers are now generally required by the IRS.

5. Save your file (File/Save). Follow the procedure outlined under the Help/Index Menu under Topic No. 10 to send your test file to the IRS (your source file is converted to IRS text format). Use this site to upload your IRS1 text file: http://fire.test.irs.gov In 1 or 2 days go back and get your "File Status" from the FIRE system. Print your "file status" for proof that you are accepted into the program.

Technical Notes:

For state reporting, 1099 Express inserts a special state code in the B record for each payee in positions 747-748, for example Wisconsin is 55. For each state being reported, 1099 Express generates a K Record with control totals for all amount codes reported to that state. K Records follow the C Record, and come before the final F Record. Control totals for all K Records must equal the control totals in the C Record. For example, if reporting form 1099-Misc and 5 different states, there would be 5 K Records added to the IRS file before the final F Record. There is always one K Record for each state, regardless of the number of payees reporting to that state. For more information see Output File Format.

Some states require notification. Please see IRS Publication 1220 for more information if you plan to use the Combined Federal/State Filing Program.
State Web Sites:

https://www.irs.gov/businesses/small-businesses-self-employed/state-government-websitesRelated Topics

More State Web Sites: http://www.aicpa.org/yellow/yptsgus.htm

Definition of Filer and TCC Holder

Entering Payee and Company Data

Importing Data

Printing 1099s

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