New Jersey Division of Taxation
NJ-1040 E-Filing Mandate
Frequently Asked Questions
(12/31/07)
Requirements |
Registration |
Opt-Out |
Extensions |
Acknowledgments |
Miscellaneous
Requirements
What are the requirements of the E-File mandate?
Tax practitioners who prepared or filed 50 or more 2006 New Jersey Resident Income Tax Returns are required to electronically file all 2007 New Jersey Resident Income Tax Returns.
What types of returns are not included?
New Jersey non-resident, part-year resident, amended, prior year, and fiduciary returns are not included in the mandate at this time.
How will the mandate be applied in subsequent years?
When a tax practitioner meets or exceeds the threshold for prepared or filed returns in any year, they will be required to electronically file all New Jersey Resident Income Tax Returns in subsequent years.
How does the Division of Taxation determine who is a paid preparer?
The determination is made whenever the “Paid Preparer’s” information is completed on any New Jersey Resident Tax Return. Additionally, a return of this type will be counted towards the threshold for that preparer.
Will the State notify each tax practitioner who is required to file electronically based on the threshold?
It is the responsibility of the tax practitioner to determine if they will or will not meet the mandated requirement. The New Jersey Division of Taxation has the right to review those instances wherein a tax practitioner has failed to comply with the requirements.
Does the mandate apply to practitioners who are located outside New Jersey?
Yes. The mandate applies to tax practitioners who file New Jersey Resident Tax Returns, regardless of where they are located.
Does e-filing increase the preparer’s liability?
Absolutely not! Under New Jersey tax law, the taxpayer is responsible for the accuracy of the information on his/her tax return, for filing it timely and for timely payment of any tax owed.
A tax practitioner who files New Jersey tax returns and/or pays New Jersey taxes on behalf of either an individual or a business client does not become personally responsible for payment of the client’s liabilities. This clarification applies only for New Jersey purposes and does not affect responsibilities to the IRS or any other state.
Registration
How do I sign up to file electronically?
A practitioner whose business is located outside the State of New Jersey is required to register for the NJ E-File Program with the New Jersey Division of Revenue. The registration form can be requested by calling (609) 633-1132 or by downloading the form from the Division of Revenue’s website.
Practitioners whose businesses are located in New Jersey are no longer required to complete an initial registration. The Division of Revenue receives their registration information from the IRS.
In addition, registration is not required for NJ WebFile. It will be available on or before January 31, 2008 and can be accessed from the Division of Taxation’s website by clicking the ‘File Online’ link.
Does the registration have to be renewed every year?
Once registered with the NJ Division of Revenue, a tax practitioner does not have to renew their registration as long as they continue to be an approved Electronic Return Originator (ERO) with the IRS.
How do I find software that supports electronic filing?
The IRS provides a list of software developers on their website. The list includes the States that the software products support.
NJ WebFile is available on the Division of Taxation’s website to e-file New Jersey Resident Tax Returns without cost to the taxpayer or to the practitioner.
Is there a filing fee to e-file in New Jersey?
This mandate does not impose a fee on taxpayers or tax practitioners to e-file tax returns, regardless of the number of tax returns filed.
What happens if I meet the threshold but do not e-file my clients’ returns?
P.L.2006, c.36 provides for the imposition of a penalty for non-compliance with this mandate. A tax practitioner may be assessed a penalty of $50 per return that was not e-filed as required.
Opt-Out
Can I choose not to e-file a tax return for a client?
No. Tax practitioners cannot op-out. The E-File Opt-Out Request Form, Form NJ-1040-O, is provided for taxpayers who choose not to have their tax return e-filed. It is available on the Division of Taxation’s website.
What if I have returns that cannot be e-filed? Will they be counted towards the return threshold?
Most New Jersey Resident Tax Returns (NJ-1040) can be e-filed. In those instances when one cannot be e-filed, Form NJ-1040-O, the opt-out form, must be completed. You should enter an explanation for your use of the form. These returns will be counted towards the threshold.
What if my client does not want to have his return electronically filed?
Taxpayers may opt-out of this program by completing and signing Form NJ-1040-O, the E-File Opt-Out Request Form, which is available on our website. Practitioners are required to maintain the completed and signed form in their files for each and every client for whom an NJ-1040 is not e-filed.
What do I do if I don’t have an EFIN and can’t e-file?
Until you receive your Electronic Filing Identification Number (EFIN) from the IRS, you should utilize NJ WebFile if it supports your client’s return. If you cannot use this product, you must complete Form NJ-1040-O, noting on it the circumstances why you could not electronically file. Retain the form with your copy of the return. Additionally, if you have a letter from the IRS that indicates you’ve been denied an EFIN, the letter should be part of the file.
Extensions
Am I required to electronically file Form NJ-630?
It is not a requirement to electronically file Form NJ-630, Application for Extension of Time to File. It may be filed by paper or online from the New Jersey Division of Taxation’s website.
Please be aware that an extension of time to file is not an extension of time to pay the tax due.
Can I e-file a New Jersey tax return if I have a federal extension?
Yes. New Jersey tax returns can be e-filed when using a federal extension. Please be sure to fill-in the federal extension check-off and, if your application for a federal extension was filed online, enter your confirmation number.
Acknowledgments
Why did I receive a conditional State Acknowledgement for an e-filed return?
A conditional State Acknowledgement is generated when an Electronic Return Originator (ERO) is not registered with the New Jersey Division of Revenue. Initial registration with the Division of Revenue is mandatory for any participant whose business address is outside the State of New Jersey.
I received a rejected return with an error code. How can I determine what the error code means and how to resolve it?
The New Jersey Division of Revenue has a list of error codes for e-filed returns. You can access these error codes on their website.
Miscellaneous
Is a PIN required to e-file New Jersey income tax returns?
New Jersey does not require a PIN when e-filing a New Jersey income tax return. Taxpayers with a self-selected Federal PIN or a Tax Practitioner PIN may still use either one.
Does e-file support multiple entries on NJ Schedule B, Net Gains or Income from Disposition of Property?
Tax practitioners who complete NJ Schedule B for a client using e-file software or NJ WebFile may choose to enter one line of information that summarizes all of their client’s transactions. Simply enter “various” or “see attached” to describe the kind of property and enter the sum of all transactions in the appropriate fields. The tax practitioner must keep a copy of the attachments in their files for each client for whom they completed NJ Schedule B in this manner.
This summarization is for New Jersey purposes only. You may want to check with the IRS to determine the manner in which Federal Schedule D should be completed.
How quickly will my clients get their refunds when I e-file their tax return?
Most refunds are mailed or deposited into the taxpayer’s account within two weeks of filing. Occasionally, additional information may be required to insure the accuracy of entries made on the return. In these cases, the filer is notified and the refund is processed as quickly as possible upon receipt of the supporting information.
If the taxpayer has a balance due, can I still e-file their tax return?
The e-filing programs provide a great deal of flexibility. The Joint Federal/State Electronic Filing Program and NJ WebFile allow for returns to be completed and transmitted early in the tax season while making provisions to provide payment at a later date.
Payments can be made in one of three ways:
Should I have my clients complete a signature document?
The State of New Jersey does not require the use of signature documents for e-filed NJ Gross Income Tax returns.
Does e-file prevent my clients from viewing their returns prior to submission?
Since taxpayers are responsible for the accuracy of their tax returns, all taxpayers should carefully review their returns prior to sending them to the Division. This applies to returns they prepare and complete themselves as well as to returns prepared and completed by a paid preparer. Electronic filing does not prevent the review of a completed return prior to submission.
Are electronic filing fees charged by tax practitioners subject to sales tax?
Electronic filing fees are not subject to sales tax if included in the full invoice for a tax filing prepared by a tax practitioner. The electronic filing fee will be treated as part of the exempt professional service. Tax practitioners may state that the fee for electronic filing is included in the service charge. For example, “This invoice includes approximately $XX related to the process of electronically filing your return.”
Will I be notified of changes to the E-File Mandate?
If you would like to receive email messages concerning the E-File Mandate and other matters of general interest, please register for ENews. Subscribe now to receive news and/or links to materials recently posted on the Division’s website.
What are the requirements of the E-File mandate?
Tax practitioners who prepared or filed 50 or more 2006 New Jersey Resident Income Tax Returns are required to electronically file all 2007 New Jersey Resident Income Tax Returns.
What types of returns are not included?
New Jersey non-resident, part-year resident, amended, prior year, and fiduciary returns are not included in the mandate at this time.
How will the mandate be applied in subsequent years?
When a tax practitioner meets or exceeds the threshold for prepared or filed returns in any year, they will be required to electronically file all New Jersey Resident Income Tax Returns in subsequent years.
How does the Division of Taxation determine who is a paid preparer?
The determination is made whenever the “Paid Preparer’s” information is completed on any New Jersey Resident Tax Return. Additionally, a return of this type will be counted towards the threshold for that preparer.
Will the State notify each tax practitioner who is required to file electronically based on the threshold?
It is the responsibility of the tax practitioner to determine if they will or will not meet the mandated requirement. The New Jersey Division of Taxation has the right to review those instances wherein a tax practitioner has failed to comply with the requirements.
Does the mandate apply to practitioners who are located outside New Jersey?
Yes. The mandate applies to tax practitioners who file New Jersey Resident Tax Returns, regardless of where they are located.
Does e-filing increase the preparer’s liability?
Absolutely not! Under New Jersey tax law, the taxpayer is responsible for the accuracy of the information on his/her tax return, for filing it timely and for timely payment of any tax owed.
A tax practitioner who files New Jersey tax returns and/or pays New Jersey taxes on behalf of either an individual or a business client does not become personally responsible for payment of the client’s liabilities. This clarification applies only for New Jersey purposes and does not affect responsibilities to the IRS or any other state.
Registration
How do I sign up to file electronically?
A practitioner whose business is located outside the State of New Jersey is required to register for the NJ E-File Program with the New Jersey Division of Revenue. The registration form can be requested by calling (609) 633-1132 or by downloading the form from the Division of Revenue’s website.
Practitioners whose businesses are located in New Jersey are no longer required to complete an initial registration. The Division of Revenue receives their registration information from the IRS.
In addition, registration is not required for NJ WebFile. It will be available on or before January 31, 2008 and can be accessed from the Division of Taxation’s website by clicking the ‘File Online’ link.
Does the registration have to be renewed every year?
Once registered with the NJ Division of Revenue, a tax practitioner does not have to renew their registration as long as they continue to be an approved Electronic Return Originator (ERO) with the IRS.
How do I find software that supports electronic filing?
The IRS provides a list of software developers on their website. The list includes the States that the software products support.
NJ WebFile is available on the Division of Taxation’s website to e-file New Jersey Resident Tax Returns without cost to the taxpayer or to the practitioner.
Is there a filing fee to e-file in New Jersey?
This mandate does not impose a fee on taxpayers or tax practitioners to e-file tax returns, regardless of the number of tax returns filed.
What happens if I meet the threshold but do not e-file my clients’ returns?
P.L.2006, c.36 provides for the imposition of a penalty for non-compliance with this mandate. A tax practitioner may be assessed a penalty of $50 per return that was not e-filed as required.
Opt-Out
Can I choose not to e-file a tax return for a client?
No. Tax practitioners cannot op-out. The E-File Opt-Out Request Form, Form NJ-1040-O, is provided for taxpayers who choose not to have their tax return e-filed. It is available on the Division of Taxation’s website.
What if I have returns that cannot be e-filed? Will they be counted towards the return threshold?
Most New Jersey Resident Tax Returns (NJ-1040) can be e-filed. In those instances when one cannot be e-filed, Form NJ-1040-O, the opt-out form, must be completed. You should enter an explanation for your use of the form. These returns will be counted towards the threshold.
What if my client does not want to have his return electronically filed?
Taxpayers may opt-out of this program by completing and signing Form NJ-1040-O, the E-File Opt-Out Request Form, which is available on our website. Practitioners are required to maintain the completed and signed form in their files for each and every client for whom an NJ-1040 is not e-filed.
What do I do if I don’t have an EFIN and can’t e-file?
Until you receive your Electronic Filing Identification Number (EFIN) from the IRS, you should utilize NJ WebFile if it supports your client’s return. If you cannot use this product, you must complete Form NJ-1040-O, noting on it the circumstances why you could not electronically file. Retain the form with your copy of the return. Additionally, if you have a letter from the IRS that indicates you’ve been denied an EFIN, the letter should be part of the file.
Extensions
Am I required to electronically file Form NJ-630?
It is not a requirement to electronically file Form NJ-630, Application for Extension of Time to File. It may be filed by paper or online from the New Jersey Division of Taxation’s website.
Please be aware that an extension of time to file is not an extension of time to pay the tax due.
Can I e-file a New Jersey tax return if I have a federal extension?
Yes. New Jersey tax returns can be e-filed when using a federal extension. Please be sure to fill-in the federal extension check-off and, if your application for a federal extension was filed online, enter your confirmation number.
Acknowledgments
Why did I receive a conditional State Acknowledgement for an e-filed return?
A conditional State Acknowledgement is generated when an Electronic Return Originator (ERO) is not registered with the New Jersey Division of Revenue. Initial registration with the Division of Revenue is mandatory for any participant whose business address is outside the State of New Jersey.
I received a rejected return with an error code. How can I determine what the error code means and how to resolve it?
The New Jersey Division of Revenue has a list of error codes for e-filed returns. You can access these error codes on their website.
Miscellaneous
Is a PIN required to e-file New Jersey income tax returns?
New Jersey does not require a PIN when e-filing a New Jersey income tax return. Taxpayers with a self-selected Federal PIN or a Tax Practitioner PIN may still use either one.
Does e-file support multiple entries on NJ Schedule B, Net Gains or Income from Disposition of Property?
Tax practitioners who complete NJ Schedule B for a client using e-file software or NJ WebFile may choose to enter one line of information that summarizes all of their client’s transactions. Simply enter “various” or “see attached” to describe the kind of property and enter the sum of all transactions in the appropriate fields. The tax practitioner must keep a copy of the attachments in their files for each client for whom they completed NJ Schedule B in this manner.
This summarization is for New Jersey purposes only. You may want to check with the IRS to determine the manner in which Federal Schedule D should be completed.
How quickly will my clients get their refunds when I e-file their tax return?
Most refunds are mailed or deposited into the taxpayer’s account within two weeks of filing. Occasionally, additional information may be required to insure the accuracy of entries made on the return. In these cases, the filer is notified and the refund is processed as quickly as possible upon receipt of the supporting information.
If the taxpayer has a balance due, can I still e-file their tax return?
The e-filing programs provide a great deal of flexibility. The Joint Federal/State Electronic Filing Program and NJ WebFile allow for returns to be completed and transmitted early in the tax season while making provisions to provide payment at a later date.
Payments can be made in one of three ways:
- Electronic Check (e-check) – Available on the Division’s website.
- Credit Card – Online or by phone through Official Payments Corporation.
- Check – Submitted with a payment voucher, Form NJ-1040-V.
Should I have my clients complete a signature document?
The State of New Jersey does not require the use of signature documents for e-filed NJ Gross Income Tax returns.
Does e-file prevent my clients from viewing their returns prior to submission?
Since taxpayers are responsible for the accuracy of their tax returns, all taxpayers should carefully review their returns prior to sending them to the Division. This applies to returns they prepare and complete themselves as well as to returns prepared and completed by a paid preparer. Electronic filing does not prevent the review of a completed return prior to submission.
Are electronic filing fees charged by tax practitioners subject to sales tax?
Electronic filing fees are not subject to sales tax if included in the full invoice for a tax filing prepared by a tax practitioner. The electronic filing fee will be treated as part of the exempt professional service. Tax practitioners may state that the fee for electronic filing is included in the service charge. For example, “This invoice includes approximately $XX related to the process of electronically filing your return.”
Will I be notified of changes to the E-File Mandate?
If you would like to receive email messages concerning the E-File Mandate and other matters of general interest, please register for ENews. Subscribe now to receive news and/or links to materials recently posted on the Division’s website.
