THE NEW JERSEY ELECTRONIC FILING MANDATE

This post is for NJ tax pros.  I will outline my NJ-1040 submission practice – and ask that you let me know if you think I am following the law.

Under the NJ “Electronic Filing Mandate” preparers that reasonably expect to prepare 11 or more individual gross income tax resident returns (including those filed for trusts and estates) during the tax year must use electronic methods to file those returns for which an electronic filing option is available.

I do not use flawed and expensive tax preparation software to prepare my federal and state 1040s – and at this point in my career I never will.  Therefore the only electronic filing option available to me for NJ returns is NJWebFile.

Because of the many, in my opinion unnecessary, restrictions and limitations to the NJWebFile system I cannot submit all of my NJ-1040s using this method – even if I wanted to.  For these returns, and in my case, there is no electronic filing option available.  I do not, in my opinion, need a client-signed OPT-OUT form for those returns I cannot submit electronically because NJWebFile will not allow me to do so.

Whenever possible I submit my NJ-1040s “electronically” via NJWebFile, unless the client specifically “opts out” of electronic filing.  In such a case I get a signed OPT-OUT form from the client.

It is beneficial for a client whose NJ-1040 requests a refund to submit their return via NJWebFile because doing this allows their refund to be directly deposited to their bank account.  Despite the fact that direct deposit would save the state money, NJ does not allow direct deposit for refunds requested on returns that are not, or cannot be, submitted electronically.

So what do you think?

FYI, New York State specifically exempts me from the NY electronic filing mandate because I do not use flawed and expensive tax preparation software.  They still, however, extort $100 from me each year for the “privilege” of preparing a little over 20 NY state income tax returns.

RDF