Chapter 8

Federal/State Electronic Filing

EROs, Intermediate Service Providers, and Transmitters accepted in the IRS E-File Program will be able to participate in the Fed/State cooperative program and file both the federal return and the State return in one transmission or the State return separately to the IRS Philadelphia Submission Processing Center. The software used to transmit the data must be certified by both the IRS and the NCDOR. The IRS will acknowledge acceptance of the federal data and receipt of a State data packet. The IRS acts as a conduit through which NCDOR will retrieve the State data packet for processing. The State data packet consists of the State return and a copy of the federal return.

NCDOR will acknowledge receipt of the State data packet through the Fed/State Acknowledgment System and will then process the taxpayer’s return.

Approved refunds will be processed within four weeks from the acknowledgment date from NCDOR that is posted to the IRS. Refunds that are directly deposited into a taxpayer’s account will be quicker.

There are two ways to file an income tax return electronically. If a taxpayer has a personal computer, the federal and state returns can be filed electronically online. The taxpayer must use tax preparation software or an online service that allows the capability of filing both the federal and state returns electronically. A list of online software products can be found on NCDOR’s website. The software package will provide instructions for transmitting the returns. Acknowledgments will be sent to the online transmitter that the State return has been received.

If the taxpayer does not have access to a personal computer, he or she will need to contact a tax professional who offers electronic filing of federal and state returns. Tax professionals must be approved by the IRS.