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OKLAHOMA TAX COMMISSION Electronic Filer Handbook Individual Income Tax Tax Year 2010 Revised 10-2010 Table of Contents Chapter Section Titles Page Introduction 1 Oklahoma Electronic Filing Calendar 2 Publications 3 1 Changes for Tax Year 2010 4 2 Federal/State Electronic Filing 8 * General Information * How Federal/State Electronic Filing Works * How State-only Electronic Filing Option Works * Acknowledgement * Who May Participate * Mandate 3 Filing and Electronic Return 10 * Composition of an Electronic Return * Electronic Portion of Returns * Non-Electronic Portion of Returns * Exclusions from Electronic Filing 4 Rejected Returns 13 5 Form 511EF 14 6 Refunds 15 7 Payment of Balance Due Returns 16 8 Information Electronic Filers Must Provide to the Taxpayer 16 9 Responsibilities of Electronic Filers 18 *Penalties *Advertising Standards *Monitoring and Suspension of an Electronic Filer 1 Introduction The Oklahoma Tax Commission (OTC) joined with the Internal Revenue Service (IRS) to provide for electronic filing of state individual income tax returns. The Federal/State Electronic Filing Program (JELF) enables taxpayers to file both returns electronically through their tax prepare. Beginning with Tax Year 2007, Oklahoma began participating in the State-Only portion of the Electronic Filing Program which enables taxpayers to electronically file their Oklahoma return separately from the filing of the Federal return. Oklahoma relies on the IRS to receive the State’s electronic data. The IRS checks the data for proper format and makes it available to OTC for retrieval. Beginning with tax year 2009, OTC, in conjunction with the IRS, began accepting returns filed by method of the Modernized e-File system (MeF). This transmission method is a Web Service using Simple Object Access Protocol (SOAP) with attachments messaging capability. State returns can be submitted as linked to the IRS submission (also referred to as a Fed/State return) or as an unlinked return (also referred to as a State Standalone return). Oklahoma expanded e-File under MeF to include part-year and nonresident returns (511NR); check with your software provider to see if they are supporting Form 511NR for tax year 2010. Electronically transmitted individual income tax returns will be accepted from all participants that are accepted into the Federal electronic filing program and are using accepted Federal/State Electronic Filing software, subject to suitability checks. IRS Publication 1345, Handbook for Electronic Filers of Individual Income Tax Returns, as well as all rules, regulations and requirements governing tax preparers, transmitters, and originators of returns put forth by the IRS are used by OTC. The Oklahoma Handbook is to be used in conjunction with the IRS Publication 1345. Since most functions in the Federal/State Electronic Filing Program are the same, the Oklahoma Handbook highlights the special features unique to Oklahoma. Your comments on this handbook are appreciated. Suggestions may be directed to: Oklahoma Tax Commission Communications Division PO Box 26890 Oklahoma City OK 73126-0890 2 Oklahoma Electronic Filing Calendar For Tax Period January 1, 2010 to December 31, 2010 Begin Federal/State Software Testing PATS (JELF) November 1, 2010 ATS (MeF) November 9, 2010 End Federal/State Software Testing PATS (JELF) January 7, 2011 Begin Transmitting Return to IRS/OTC JELF Same Date as IRS MeF Same Date as IRS Last Date to Transmit Oklahoma Returns JELF October 15, 2011 Note: Federal/State software testing will begin in November of 2010 and for PATS will end January 2011. Oklahoma conforms to the dates established by the IRS and are subject to any changes the IRS may make. 3 Publications The following publications describe the process of electronic filing : Internal Revenue Service Publications Publication 1345, Handbook for Authorized IRS e-file Providers Publication 1346, Electronic Return File Specifications and Record Layouts for Individuals Income Tax Returns (Tax Year 2010) Publication 1436, Test Package for Electronic Filers of Individual Income Tax Returns (Tax Year 2010) Publication 3112, IRS e-file Application and Participation Publication 4164, Modernized e-File (MeF) Guide for Software Developers and Transmitters (Tax Year 2010/Processing Year 2011) Oklahoma Tax Commission Publications Oklahoma Individual Income Tax Electronic Filers Handbook (Tax Year 2010) Oklahoma Tax Commission JELF Electronic Return Filing Guide (For Software Developers) (Tax Year 2010) 2010 MeF Schemas (For Software Developers) Oklahoma Test Package for Electronic Filing of Individual Income Tax Returns (For Software Developers) (Tax Year 2010) 4 Chapter 1 Changes to 2010 Income Tax Taxable Income: Standard Deduction – The Oklahoma standard deduction is equal to the basic Federal standard deduction. For tax year 2010, the standard deduction for filing statuses married filing joint and qualifying widow is $11,400, for head of household it is $8,400 and for single and married filing separate it is $5,700. Other Retirement exclusion – The Other Retirement exclusion is no longer subject to the modified Oklahoma Adjusted Gross Income limit. Taxpayer of any income level may now qualify for this exclusion. Last year, modified Oklahoma Adjusted Gross Income could not have exceeded $100,000 for single & $200,000 for married filing joint. Federal Civil Service Retirement in Lieu of Social Security exclusion – The percentage of the taxable portion of civil service retirement received in lieu of social security which may be excluded has increased from 60% to 80%. Military Pay exclusion – Effective July 1, 2010 through tax year 2014, the military pay exclusion will increase from $1,500 to 100%. The military member will be entitled to a $1,500 exclusion for the income earned during the first six months and a 100% exclusion on the income earned during the 2nd six months. There will be a worksheet in the income tax packet to help determine the exclusion. Payments received as a result of a Military member being killed in a combat zone: Any payment made by the United States Department of Defense as a result of the death of a member of the Armed Forces who has been killed in action in a designated combat zone shall be exempt from Oklahoma income tax during the taxable year in which the individual is declared deceased by the Armed Forces. Income earned by an individual whose Military spouse was killed in a combat zone: Any income earned by the spouse of a member of the Armed Forces of the United States who has been killed in action in a designated combat zone shall be exempt from Oklahoma income tax during the taxable year in which the individual is declared deceased by the Armed Forces. Income from Discharge of Indebtedness Add-back – Income from discharge of indebtedness deferred under Section 108 (i)(1) of the Internal Revenue Code, as provided for in the American Recovery and Reinvestment Act of 2009, must be added back to compute Oklahoma taxable income. Such income will be deducted from Oklahoma taxable income when ratably included in Federal income over five subsequent tax years. Emergency Medical Personnel Death Benefit exclusion - Expands the exemption for the $5,000 death benefit, provided for in Title 63 O.S. § 1-2505.1, to include the death benefit paid to the designated beneficiary of a registered emergency medical responder whose death is a result of their official duties performed in the line of duty. 5 Tax: Business Activity Tax – Every sole proprietor or farmer doing business in Oklahoma is required to file a Form 511-BAT “Oklahoma Business Activity Tax” to report their Oklahoma net revenue. If they have been doing business in Oklahoma for more than 1 year, as of December 31st, they are subject to the annual Business Activity Tax of $25. Credits: - there are three new credits and several have been amended. Credit for Wire Transfer Fee – A credit is allowed for the electronic funds transfer fee paid pursuant to the Drug Money Laundering and Wire Transmitter Act (Title 63 O.S. Section 2-503.1j). Taxpayers will claim the credit for all fees paid during tax years 2009 and 2010 on their 2010 tax return. Any credit allowed but not used will have a five year carryover provision. Upon request you must be able to document the amount of fees paid upon which the credit is based. Credit for Manufacturers of Electric Vehicles - Establishes a credit for the manufacturer of low-speed electric motor vehicles, medium-speed electric motor vehicles or electric motor vehicles which are manufactured after June 30, 2010. The manufacturer must have a manufacturer exemption permit. The credit will be as follows: • For low-speed electric motor vehicles the credit is $500 per vehicle manufactured. • For medium-speed electric motor vehicles the credit is $1,000 per vehicle manufactured. • For electric motor vehicles, which are not low-speed or medium-speed vehicles, the credit is $2,000 per vehicle manufactured. Any credit allowed but not used will have a five year carryover provision. Business Activity Tax Credit – Establishes a credit equal to the $25 Oklahoma Business Activity Tax paid on Form 511 or 511NR. The credit may only be taken for the year in which the Business Activity Tax is levied and if such tax is timely paid. Credit for Investment in Qualified Electric Motor Vehicle Property – Establishes a sunset date for the Credit. No credit will be allowed for investments in qualified electric motor vehicle property placed in service on or after July 1, 2010. Extends the unused carryover provision from 3 years to 5 years on qualified investments made during the period January 1, 2010 through June 30, 2010. See Form 567-B Credit for Investment in Clean-Burning Motor Vehicle Fuel Property – Several amendments have been made to the credit, among them are: • Hydrogen has been added as a qualified fuel, but for tax year 2010 only. • Methanol and “M-85” are no longer considered qualifying fuels. • The credit, for property directly related to the delivery of a qualified fuel into the fuel tank of a motor vehicle and the storage of such fuel, increased from 50% to 75% of the cost of the qualified property. • Adds a credit for a public access recharging system for vehicles propelled by electricity equal to 75% of the cost of the qualified property. • Adds a credit for a natural gas refueling station in a private residence equal to the lesser of 50% of the cost of the qualified property or $2,500. • Extends the unused carryover provision from 3 years to 5 years. See Form 567-A 6 Credit for Tourism Development or Qualified Media Production Facility The definition of “tourism attraction” was expanded to include a destination hotel whose location and amenities, including but not limited to upscale dining, recreation and entertainment, make the hotel itself a destination for tourists. The amount of the credit was modified to up to 10% or up to 25% of approved costs, but will be limited to the percent of the approved costs that will result in the project being revenue neutral to the State as determined by the Oklahoma Tax Commission. Previously, the amount of such credit was 10% or 25% of approved costs. Revenue neutral means the amount by which increased tax revenues from the tourism attraction project or the film, digital media or music production and development facility will exceed the credit. Proof of expenditures is required prior to the Tax Commission issuing a tax credit memorandum to the approved company which may be satisfied by a report from an independent certified public account. Tax Credit Moratorium A Tax Credit Moratorium has been placed on many Oklahoma credits. For more information see Form 511CR and, when applicable, the specific form for a particular credit. The following credit has been placed under a moratorium from June 1, 2010 through June 30, 2011. • Credit for Electricity Generated by Zero-Emission Facilities* The following credits have been placed under a moratorium from June 1, 2010 through December 31, 2011. • Small Business Capital Credit • Rural Small Business Capital Credit The following credits have been placed under a moratorium from July 1, 2010, through June 30, 2012. • Credit for Hazardous Waste Control • Gas Used in Manufacturing Credit • Oklahoma Investment/New Jobs Credit* • Credit for Energy Assistance Fund Contribution • Coal Credit • Oklahoma Agricultural Producers Credit • Credit for Employers Providing Child Care Programs • Credit for Entities in the Business of Providing Child Care Services • Small Business Guaranty Fee Credit • Credit for Manufacturers of Small Wind Turbines • Credit for Food Service Establishments that Pay for Hepatitis A Vaccination for their Employees • Credit for Qualified Rehabilitation Expenditures* • Credit for the Construction of Energy Efficient Homes • Credit for Modification Expenses Paid for an Injured Employee 7 • Credit for Wages Paid to an Injured Employee • Credit for Qualified Recycling Facility • Credit for Qualified Ethanol Facilities • Credit for Qualified Biodiesel Facilities • Oklahoma Local Development and Enterprise Zone Incentive Leverage Act Credit • Poultry Litter Credit • Film or Music Project Credit • Dry Fire Hydrant Credit • Credit for Railroad Modernization • Credit for Breeders of Specially Trained Canines • Credits for Employers in the Aerospace Sector • Credit for Employees in the Aerospace Sector • Credit for Financial Institutions Making Loans Under the Rural Economic Development Loan Act • Credit for Stafford Loan Origination Fee • Research and Development New Jobs Credit Carryover Provisions: Credits established before the moratorium are eligible to be claimed under normal carryover provisions, if applicable. * These credits can be established during the moratorium but will accrue and may not be claimed until tax year 2012. Check-offs: – There are three new check-offs: Support of Folds of Honor Scholarship Program – Individual taxpayers may donate from a tax refund for the benefit of the Folds of Honor Scholarship Program, a nonprofit charitable organization providing academic and vocational training scholarships to dependents of military servicemen and servicewomen who were either killed or wounded in action due to military service in the war in Iraq or Afghanistan. Y.M.C.A. Youth and Government program - Individual taxpayers may donate up to $25 from a tax refund for the benefit of the Oklahoma chapter of the Y.M.C.A. Youth and Government program. Monies donated will be expended by the State Department of Education for the purpose of providing grants to the Program so young people may be educated regarding government and the legislative process. Multiple Sclerosis Society Fund - Individual taxpayers will be provided the opportunity to donate up to $25 from a tax refund for the benefit of the Multiple Sclerosis Society. Monies donated may be expended by the State Department of Health to provide grants to the Multiple Sclerosis Society for the purpose of mobilizing people and resources to drive research for a cure and to address the challenges of everyone affected by multiple sclerosis. Please see the 2010 Legislative Update located on our website for a complete list of all changes. 8 Chapter 2 Federal/State Electronic Filing General Information 2009 Tax Year Electronic filing continues to be very successful. During the 2010 filing season there were over 1 million taxpayers that filed e-file. Direct Deposit refunds were issued in approximately 3 to 5 days and paper refunds in 10 to 12 days. The Tax Commission would like to thank all preparers and software developers for their participation. How Federal/State Electronic Filing Works For the Federal/State Electronic Filing Program (JELF), both the Federal return and the State return must be filed in one transmission to the IRS Service Center. For the Modernized e-File Program (MeF), the Federal and State returns do not have to be transmitted together. The State return can be transmitted after the Federal return is transmitted and has been accepted by the IRS. The Federal and State returns will be linked by including the Submission ID of the Federal return in the State manifest. For both JELF and MeF, the IRS will acknowledge to the transmitter the acceptance of the Federal return and receipt of State data. The State data will then be made available for retrieval by the OTC where it will be entered and processed in the State Income Tax system. How State-only Electronic Filing Option works The Federal return does not have to be electronically filed and accepted before electronically filing the Oklahoma State-Only return. However, the Federal return must be computed before computing the Oklahoma tax return and a copy of the Federal information must be included with the Oklahoma return. Tax preparers will have to indicate in their software that it is a State-Only/Unlinked filing. The IRS will receive the return and the data will be made available for retrieval by OTC. After the data is retrieved, it will be acknowledged and processed by Oklahoma. For both the Federal/State Electronic Filing Program (JELF) and the Modernized e-File Program (MeF), the Federal return does not have to be electronically filed and accepted before electronically filing the Oklahoma State-Only / Unlinked return. 9 Acknowledgement The OTC will acknowledge, in a separate acknowledgement, receipt of the Oklahoma data to the transmitter through the IRS. The transmitter’s acknowledgement should be available within 3 days for JELF and within 24 hours for MeF from the time the return data is received from the IRS Service Center. Who May Participate Federal/State Electronic Filing for Oklahoma returns is available to all interested parties who have been accepted in the Federal electronic filing program and transmit returns to the IRS Service Centers. State-Only/Unlinked Electronic Filing for Oklahoma returns is also available to such interested parties if it is supported by their software. Note: You do not need to register with the OTC. When the IRS approves you for electronic filing of tax returns, Oklahoma automatically accepts you. Mandate All “specified tax return preparers” must file individual income tax returns electronically. This will apply to returns filed after December 31, 2010. The term specified tax return preparer has the same meaning as provided in Section 6011 of the Internal Revenue Code. 10 Chapter 3 Filing an Electronic Return Composition of an Electronic Return In total, an Oklahoma electronic return contains the same information as a comparable return filed entirely on paper documents. An electronic return consists of: * Data transmitted electronically to the OTC using the IRS as a conduit; and * Paper documents (sent directly to OTC) that contain information which cannot be electronically transmitted, such as taxpayer signatures, documents prepared by third parties, etc. This does not include forms or schedules which are not accepted by the electronic filing system. Note: The Oklahoma form 511 requires an accompanying copy of the taxpayer’s Federal return. The vendor’s software will fulfill his/her requirement by copying the Federal data into the unformatted records of the state packet before the return is transmitted to the IRS. Electronic Portion of Returns The following forms and schedules can be transmitted electronically and are considered the electronic portion of the return. Both the MeF and JELF programs support the following forms: * All Federal individual income tax forms and schedules accepted for IRS e-file * Oklahoma Resident Individual Income Tax Return & Schedules (OTC Form 511) * Oklahoma Business Activity Tax form (OTC Form 511-BAT) * Oklahoma Income Tax Other Credits form (OTC Form 511CR) * Oklahoma Credit for Tax Paid to Another State (OTC Form 511TX) * Refund of Sales Tax (OTC Form 538-S) when attached to Form 511 * Refund or Credit for Property Tax (OTC Form 538-H) when attached to Form 511. Only the MeF program supports the following forms: * Oklahoma Part-year and Nonresident Individual Income Tax Return & Schedules (OTC Form 511NR) * Oklahoma Capital Gain Deduction for Residents Filing Form 511 (OTC Form 561) * Oklahoma Capital Gain Deduction for Part-year and Nonresidents Filing Form 511NR (OTC Form 561NR) * Binary Attachments for any supporting documentation (PDFs) 11 Non-Electronic Portion of Returns The non-electronic portion of the return consists of the following: Oklahoma Individual Income Tax Declaration for Electronic Filing (OTC 511-EF), required for all electronic returns, is to be retained by the ERO for 3 years. Copies of forms W-2, W-2G, or 1099-R, which would normally be attached to a paper return, must be attached to the form 511EF and retained by the preparer. ERO’s may be subject to inspection of records by the OTC during the filing season. If a return contains any forms or supporting schedules listed below and binary attachments* are not supported, they should be attached to the 511EF and mailed to the Oklahoma Tax Commission by the taxpayer. These are not part of the electronic record and may be required by OTC. Form OW-8-P-Sup-I - Annualized Income Installment Method for Individuals Form 575 - May 8 or 9, 2003 Tornado Tax Credit Form 511-NOL – Oklahoma Net Operating Loss Form 573 - Farm Income Averaging COFT’s Form – Oklahoma Volunteer Firefighter Tax Credit Form 561 – Oklahoma Capital Gain Deduction Include a copy of other state’s income tax return if Form 511TX is filed Any Oklahoma statements containing additional information Note: The 511EF should be placed on top as a cover page. Do not mail copies of the Oklahoma Income Tax Return, Federal Income Tax return or withholding statements. Only mail the 511EF to the OTC if you have any of the above forms as part of the transmitted tax return. * If binary attachments are supported these forms and /or supporting schedules are attached, as PDFs, to the e-Filed return. 12 Exclusions from Electronic Filing The following types of returns are excluded from electronic filing for tax year 2010: * All returns and schedules excluded from IRS e-file * Returns from preparers, originators or transmitters who have not been accepted into the Electronic Filing Program * Amended returns or corrected returns * Returns for any tax year other than calendar year 2010 if filed through the JELF program * Returns for any tax year other than calendar year 2009 and 2010 if through the MeF program * Returns with dollars and cents entries. Only whole dollars are accepted * Returns containing more than 3 form 511TX (Credit for Tax Paid to Another State) * Returns transmitted after October 15, 2011 if filed through the JELF program (Returns can be transmitted year-round through the MeF program) 13 Chapter 4 Rejected Returns Paper returns, to replace electronic returns that were rejected by the IRS and not resubmitted, are to be mailed to the OTC. The following information is required: * A printout of the return * The original, signed, Form 511EF * State copies of all W-2’s, W-2G’s and 1099-R’s * A cover letter giving the date the return was rejected by the IRS eg: rejected 01/30/11 Mail paper returns to: Oklahoma Tax Commission Carol Shrum – Taxpayer Assistance Division PO Box 269057 Oklahoma City OK 73126-9057 When the paper replacement return is received by the OTC, at the specified address, it will be given priority processing status. Contact Carol Shrum at 405-522-3827 for additional information, or inquiries. Note: If non-qualifying returns are filed electronically, the replacement returns will not be given priority by the OTC The OTC will monitor receipt of replacement returns. Failure to submit paper returns in a timely manner may adversely affect your authorization to file Oklahoma electronic returns. Changes to Electronic Returns: After electronic returns are transmitted, they cannot be recalled or intercepted in process. If the electronic filer or taxpayer wishes to change any entry after a return has been accepted please note the following * An Amended Oklahoma Individual Income Tax Return (511X) must be filed through the normal paper filing process * No action should be taken to change the computation between the date transmitted and the date the OTC acknowledges the return * If an Oklahoma return is transmitted in error, please contact the OTC immediately at (405) 522-5723 or by faxing to (405) 522-2072 Attn: Richard Pachankis. 14 Chapter 5 Form 511-EF Oklahoma Individual Income Tax Declaration for Electronic Filing Form 511-EF is the signature portion of the return. It must be completed and signed* by all appropriate parties before the return is transmitted electronically. The preparer is to keep the 511-EF as documentation. Form 511-EF • Authenticates the return • Authorizes the ERO to file the return electronically on behalf of the taxpayer. Form 511-EF does not serve as a power of attorney or as a substitute for the information required to be provided on the electronic tax return. Use only the official Form 511-EF or an approved substitute which duplicates the official form in format, language, content and size. Photocopies are acceptable as long as they are legible. The following is a sequence of events in the handling of Form 511-EF: 1. An ERO prepares the return and computes the taxes based on the information the taxpayer provides, or accepts an already prepared return for the purpose of electronic transmission. 2. After the return has been prepared and/or before it is transmitted, the taxpayer must verify the information on the return and sign the 511-EF prior to the electronic transmission of the tax return. Both signatures* are required on a joint return. 3. A copy of the prepared return must be provided to the taxpayer. 4. Form 511-EF should be retained by the ERO for 3 years. All EROs will be subject to periodic reviews by the OTC to assure the paperwork is being retained. If supporting schedules are required by the OTC please ensure taxpayer is given a copy of the 511-EF to mail to the OTC along with the supporting documents as mentioned in Chapter 3 Non-Electronic Portion of Returns. Form 511-EF is part of the electronic return for the purposes of taxpayer verification and signature. A blank 511-EF is the same as a blank tax return. • Practitioners are prohibited from allowing taxpayers to sign a blank tax return. • It is permissible to have the taxpayer review the completed tax return on the display terminal. * Entry of the Taxpayer’s Personal Identification Number (PIN) in the electronic filing process operated by the IRS shall service as an “electronic signature”. Entry of the Taxpayer’s PIN as signature will only be allowed on a linked (Fed/State) electronically filed return. Use of a PIN will not be allowed on an unlinked (State Standalone) return. 15 Chapter 6 Refunds Taxpayers have three options when their return shows an overpayment of their tax. They may elect to have their overpayment: * Refunded directly into their financial institution account by electronic transfer (Direct Deposit) Note: Oklahoma will only deposit into one account per tax return. * Refunded to them in the form of a paper refund check, or * Applied to next year’s estimated tax. Direct Deposit offers taxpayers a quicker more convenient way to receive their refunds, reduces the risk of loss, and allows immediate use of the funds upon deposit. Direct Deposit of a refund is not guaranteed. A direct deposit may be denied due to: * Incorrect banking data * Oklahoma income tax due from a previous year * Fines or debts owed to state agencies or IRS (ie: child support student loans, etc) * The estimated tax payments claimed on the return do not match the estimated tax payments recorded by the OTC * Adjustment is made to disallow a credit when the taxpayer was not eligible for it. * Due to changes in the electronic banking rules, the Oklahoma Tax Commission will no longer allow direct deposits to or through foreign financial institutions or if the taxpayer has a foreign address on their tax return. The taxpayer will be issued a paper check. If the taxpayer’s address contains APO or FPO that is not considered a foreign address, direct deposit will be allowed. Although we do not anticipate problems with the Federal/State Electronic Filing program, a refund may be delayed. If a taxpayer owes Oklahoma taxes, fines or a debt to a state agency, the OTC is required by law to apply (off-set) the income tax refund to these balances. Taxpayers should first confirm acknowledgment of their Oklahoma return with their practitioner or transmitter. Tax preparers should wait at least 14 days from the date of acknowledgment for a paper refund or 10 days for a direct deposit before contacting the OTC about their refund. Inquiries may be directed to the Taxpayer Assistance Division at (405) 521-3160 or 1-800-522-8165. 16 Chapter 7 Payment of Balance Due Amounts The taxpayer is responsible for paying the amount due to the OTC when a return is filed or no later than April 20, 2011 if paid electronically.* If the payment is not remitted electronically the amount due must be paid by April 18, 2011. Payment may be made by check, money order, credit card, or direct debit. Checks or money orders should be attached to the 511-V and mailed to the OTC no later than April 18, 2011. Mail to Oklahoma Tax Commission Electronic Filing PO Box 26890 Oklahoma City OK 73126-0890 Do not mail a copy of the tax return with your payment. If the taxpayer is not paying at the time of transmission, give them the completed 511-V to be mailed by April 18, 2011. If the taxpayer is making a partial payment, the form 511-V should be attached to the payment and mailed to the OTC no later than April 18, 2011. A billing coupon will be sent to the taxpayer for the balance due at which time the taxpayer will have the option of paying the remaining balance in full, or making monthly payments until the balance is paid off. Taxpayers who have a tax amount due may choose to have their payment directly withdrawn from their checking or savings account. Taxpayers must supply the bank routing and account numbers, the amount to be withdrawn and the date the funds are to be withdrawn. No form 511-V is required. The payment must be made no later than April 20, 2011. Credit Cards accepted are Discover, Master Card, Visa and American Express. Credit card payments may be accessed via the OTC web site. The taxpayer would click on links “payment options” and then “Credit Cards” on the OTC website at www.tax.ok.gov or by calling 1(866)289-0455. Please be aware a convenience fee will be added to the transaction. The payment must be made no later than April 20, 2011. The taxpayer can choose to have their payment directly withdrawn from their checking or savings account via the OTC website. The taxpayer would click on links “payment options” and then “E-Check” on the OTC website at www.tax.ok.gov. The payment must be made no later than April 20, 2011. *Warning! Due to changes in the electronic banking rules, the Oklahoma Tax Commission will no longer allow direct debits from or through foreign financial institutions. If the taxpayer uses a foreign financial institution they will be required to pay by check, money order or credit card. 17 Chapter 8 Information Electronic Filers Must Provide to the Taxpayer The ERO must furnish the taxpayer with documentation of all completed Oklahoma forms and schedules filed for the taxpayer. This documentation may be furnished on official Oklahoma forms, on copies of official forms, or on software designed forms that have been approved by the Oklahoma Tax Commission. These should be provided to the taxpayers at the time they sign form 511-EF. * The completed Oklahoma Individual Income Tax Declaration for Electronic Filing ( 511-EF) * Other documents containing required signatures * Any other documents which are not Oklahoma forms or schedules. The ERO should advise the taxpayer to retain copies of : * Forms W-2, W-2G’s, 1099-R * Any other documents, not required by OTC which the taxpayer voluntarily included with the form 511-EF as supporting material * The signed form 511-EF The ERO will also retain the 511-EF and copies of the W-2s etc for 3 years. If an electronically filed return was acknowledged as accepted by the OTC, the ERO should advise the taxpayer to wait 1 week from the acknowledgment date before making an inquiry about his/her refund. If an individual should find it necessary to contact the OTC regarding his/her income tax refund, they may do so by calling the Taxpayer Assistance Division at (405) 521-3160 or 1-800-522-8165. * The taxpayer will be required to furnish his/her (and spouse’s if applicable) social security number(s) * The taxpayer should be prepared to provide bank information if direct deposit was requested. 18 Chapter 9 Responsibilities of Electronic Filers The guidelines in IRS Publications 1345 and 3112 must be followed for Oklahoma Electronic Filing. Penalties for Disclosure or Use of Information Guidelines outlined in Section 6, IRS Revenue Procedure 93-8 should be followed, as well as Title 68, Section 205 Oklahoma Statutes. Penalties for Late Filing, Late Payment and Fraudulent Returns This provision provides due notice that all penalties, interest and criminal provisions which are applicable for paper returns, are also applicable for electronic returns. Specifically, penalty and interest on tax for late filing and/or late payment will be assessed. Penalties will be assessed for any person filing a fraudulent or misleading return. Additionally any person who willfully subscribes or presents a fraudulent return will be subject to prosecution and the penalties. * Other criminal provisions will be applicable to the extent that a person attempts to commit forgery and falsify signatures on any electronic filing form or check * Any attempt to pass bad checks for payment of taxes will be prosecuted. Advertising Standards Guidelines in IRS Publications 1345 and 3112 and Revenue Procedure 93-8, Sec 12.01 through 03 and 05 through 09 must be followed as though references to the IRS or Service were references to the OTC, State of Oklahoma, or the State and references to the FMS or Treasury Seals were references to the State of Oklahoma Seal. Monitoring and Suspension of an Electronic Filer The OTC will monitor electronic filers for conformity to this publication. The OTC can recommend suspension of an electronic filer for due cause through the local IRS District Office Coordinator. Note: Warning letters, suspension and rejection from electronic filing will be administered by the local IRS District Director. 19 For questions or inquiries please contact: Joan Korthanke (405) 521-3637 Email: jkorthanke@tax.ok.gov Or Richard Pachankis (405) 522-5723 Email: rpachankis@tax.ok.gov In State Toll Free 1-800-522-8165 ext 13637 Fax: (405) 522-1711 Email: efile@tax.ok.gov
Object Description
Description
Title | Electronic filer handbook individual income tax 2010 |
OkDocs Class# | T500.5 E38f 2010 |
Digital Format | PDF, Adobe Reader required |
ODL electronic copy | Downloaded from agency website: www.tax.ok.gov/devdocs/2010%20ELF%20OTC%20Handbook.pdf |
Rights and Permissions | This Oklahoma state government publication is provided for educational purposes under U.S. copyright law. Other usage requires permission of copyright holders. |
Language | English |
Full text | OKLAHOMA TAX COMMISSION Electronic Filer Handbook Individual Income Tax Tax Year 2010 Revised 10-2010 Table of Contents Chapter Section Titles Page Introduction 1 Oklahoma Electronic Filing Calendar 2 Publications 3 1 Changes for Tax Year 2010 4 2 Federal/State Electronic Filing 8 * General Information * How Federal/State Electronic Filing Works * How State-only Electronic Filing Option Works * Acknowledgement * Who May Participate * Mandate 3 Filing and Electronic Return 10 * Composition of an Electronic Return * Electronic Portion of Returns * Non-Electronic Portion of Returns * Exclusions from Electronic Filing 4 Rejected Returns 13 5 Form 511EF 14 6 Refunds 15 7 Payment of Balance Due Returns 16 8 Information Electronic Filers Must Provide to the Taxpayer 16 9 Responsibilities of Electronic Filers 18 *Penalties *Advertising Standards *Monitoring and Suspension of an Electronic Filer 1 Introduction The Oklahoma Tax Commission (OTC) joined with the Internal Revenue Service (IRS) to provide for electronic filing of state individual income tax returns. The Federal/State Electronic Filing Program (JELF) enables taxpayers to file both returns electronically through their tax prepare. Beginning with Tax Year 2007, Oklahoma began participating in the State-Only portion of the Electronic Filing Program which enables taxpayers to electronically file their Oklahoma return separately from the filing of the Federal return. Oklahoma relies on the IRS to receive the State’s electronic data. The IRS checks the data for proper format and makes it available to OTC for retrieval. Beginning with tax year 2009, OTC, in conjunction with the IRS, began accepting returns filed by method of the Modernized e-File system (MeF). This transmission method is a Web Service using Simple Object Access Protocol (SOAP) with attachments messaging capability. State returns can be submitted as linked to the IRS submission (also referred to as a Fed/State return) or as an unlinked return (also referred to as a State Standalone return). Oklahoma expanded e-File under MeF to include part-year and nonresident returns (511NR); check with your software provider to see if they are supporting Form 511NR for tax year 2010. Electronically transmitted individual income tax returns will be accepted from all participants that are accepted into the Federal electronic filing program and are using accepted Federal/State Electronic Filing software, subject to suitability checks. IRS Publication 1345, Handbook for Electronic Filers of Individual Income Tax Returns, as well as all rules, regulations and requirements governing tax preparers, transmitters, and originators of returns put forth by the IRS are used by OTC. The Oklahoma Handbook is to be used in conjunction with the IRS Publication 1345. Since most functions in the Federal/State Electronic Filing Program are the same, the Oklahoma Handbook highlights the special features unique to Oklahoma. Your comments on this handbook are appreciated. Suggestions may be directed to: Oklahoma Tax Commission Communications Division PO Box 26890 Oklahoma City OK 73126-0890 2 Oklahoma Electronic Filing Calendar For Tax Period January 1, 2010 to December 31, 2010 Begin Federal/State Software Testing PATS (JELF) November 1, 2010 ATS (MeF) November 9, 2010 End Federal/State Software Testing PATS (JELF) January 7, 2011 Begin Transmitting Return to IRS/OTC JELF Same Date as IRS MeF Same Date as IRS Last Date to Transmit Oklahoma Returns JELF October 15, 2011 Note: Federal/State software testing will begin in November of 2010 and for PATS will end January 2011. Oklahoma conforms to the dates established by the IRS and are subject to any changes the IRS may make. 3 Publications The following publications describe the process of electronic filing : Internal Revenue Service Publications Publication 1345, Handbook for Authorized IRS e-file Providers Publication 1346, Electronic Return File Specifications and Record Layouts for Individuals Income Tax Returns (Tax Year 2010) Publication 1436, Test Package for Electronic Filers of Individual Income Tax Returns (Tax Year 2010) Publication 3112, IRS e-file Application and Participation Publication 4164, Modernized e-File (MeF) Guide for Software Developers and Transmitters (Tax Year 2010/Processing Year 2011) Oklahoma Tax Commission Publications Oklahoma Individual Income Tax Electronic Filers Handbook (Tax Year 2010) Oklahoma Tax Commission JELF Electronic Return Filing Guide (For Software Developers) (Tax Year 2010) 2010 MeF Schemas (For Software Developers) Oklahoma Test Package for Electronic Filing of Individual Income Tax Returns (For Software Developers) (Tax Year 2010) 4 Chapter 1 Changes to 2010 Income Tax Taxable Income: Standard Deduction – The Oklahoma standard deduction is equal to the basic Federal standard deduction. For tax year 2010, the standard deduction for filing statuses married filing joint and qualifying widow is $11,400, for head of household it is $8,400 and for single and married filing separate it is $5,700. Other Retirement exclusion – The Other Retirement exclusion is no longer subject to the modified Oklahoma Adjusted Gross Income limit. Taxpayer of any income level may now qualify for this exclusion. Last year, modified Oklahoma Adjusted Gross Income could not have exceeded $100,000 for single & $200,000 for married filing joint. Federal Civil Service Retirement in Lieu of Social Security exclusion – The percentage of the taxable portion of civil service retirement received in lieu of social security which may be excluded has increased from 60% to 80%. Military Pay exclusion – Effective July 1, 2010 through tax year 2014, the military pay exclusion will increase from $1,500 to 100%. The military member will be entitled to a $1,500 exclusion for the income earned during the first six months and a 100% exclusion on the income earned during the 2nd six months. There will be a worksheet in the income tax packet to help determine the exclusion. Payments received as a result of a Military member being killed in a combat zone: Any payment made by the United States Department of Defense as a result of the death of a member of the Armed Forces who has been killed in action in a designated combat zone shall be exempt from Oklahoma income tax during the taxable year in which the individual is declared deceased by the Armed Forces. Income earned by an individual whose Military spouse was killed in a combat zone: Any income earned by the spouse of a member of the Armed Forces of the United States who has been killed in action in a designated combat zone shall be exempt from Oklahoma income tax during the taxable year in which the individual is declared deceased by the Armed Forces. Income from Discharge of Indebtedness Add-back – Income from discharge of indebtedness deferred under Section 108 (i)(1) of the Internal Revenue Code, as provided for in the American Recovery and Reinvestment Act of 2009, must be added back to compute Oklahoma taxable income. Such income will be deducted from Oklahoma taxable income when ratably included in Federal income over five subsequent tax years. Emergency Medical Personnel Death Benefit exclusion - Expands the exemption for the $5,000 death benefit, provided for in Title 63 O.S. § 1-2505.1, to include the death benefit paid to the designated beneficiary of a registered emergency medical responder whose death is a result of their official duties performed in the line of duty. 5 Tax: Business Activity Tax – Every sole proprietor or farmer doing business in Oklahoma is required to file a Form 511-BAT “Oklahoma Business Activity Tax” to report their Oklahoma net revenue. If they have been doing business in Oklahoma for more than 1 year, as of December 31st, they are subject to the annual Business Activity Tax of $25. Credits: - there are three new credits and several have been amended. Credit for Wire Transfer Fee – A credit is allowed for the electronic funds transfer fee paid pursuant to the Drug Money Laundering and Wire Transmitter Act (Title 63 O.S. Section 2-503.1j). Taxpayers will claim the credit for all fees paid during tax years 2009 and 2010 on their 2010 tax return. Any credit allowed but not used will have a five year carryover provision. Upon request you must be able to document the amount of fees paid upon which the credit is based. Credit for Manufacturers of Electric Vehicles - Establishes a credit for the manufacturer of low-speed electric motor vehicles, medium-speed electric motor vehicles or electric motor vehicles which are manufactured after June 30, 2010. The manufacturer must have a manufacturer exemption permit. The credit will be as follows: • For low-speed electric motor vehicles the credit is $500 per vehicle manufactured. • For medium-speed electric motor vehicles the credit is $1,000 per vehicle manufactured. • For electric motor vehicles, which are not low-speed or medium-speed vehicles, the credit is $2,000 per vehicle manufactured. Any credit allowed but not used will have a five year carryover provision. Business Activity Tax Credit – Establishes a credit equal to the $25 Oklahoma Business Activity Tax paid on Form 511 or 511NR. The credit may only be taken for the year in which the Business Activity Tax is levied and if such tax is timely paid. Credit for Investment in Qualified Electric Motor Vehicle Property – Establishes a sunset date for the Credit. No credit will be allowed for investments in qualified electric motor vehicle property placed in service on or after July 1, 2010. Extends the unused carryover provision from 3 years to 5 years on qualified investments made during the period January 1, 2010 through June 30, 2010. See Form 567-B Credit for Investment in Clean-Burning Motor Vehicle Fuel Property – Several amendments have been made to the credit, among them are: • Hydrogen has been added as a qualified fuel, but for tax year 2010 only. • Methanol and “M-85” are no longer considered qualifying fuels. • The credit, for property directly related to the delivery of a qualified fuel into the fuel tank of a motor vehicle and the storage of such fuel, increased from 50% to 75% of the cost of the qualified property. • Adds a credit for a public access recharging system for vehicles propelled by electricity equal to 75% of the cost of the qualified property. • Adds a credit for a natural gas refueling station in a private residence equal to the lesser of 50% of the cost of the qualified property or $2,500. • Extends the unused carryover provision from 3 years to 5 years. See Form 567-A 6 Credit for Tourism Development or Qualified Media Production Facility The definition of “tourism attraction” was expanded to include a destination hotel whose location and amenities, including but not limited to upscale dining, recreation and entertainment, make the hotel itself a destination for tourists. The amount of the credit was modified to up to 10% or up to 25% of approved costs, but will be limited to the percent of the approved costs that will result in the project being revenue neutral to the State as determined by the Oklahoma Tax Commission. Previously, the amount of such credit was 10% or 25% of approved costs. Revenue neutral means the amount by which increased tax revenues from the tourism attraction project or the film, digital media or music production and development facility will exceed the credit. Proof of expenditures is required prior to the Tax Commission issuing a tax credit memorandum to the approved company which may be satisfied by a report from an independent certified public account. Tax Credit Moratorium A Tax Credit Moratorium has been placed on many Oklahoma credits. For more information see Form 511CR and, when applicable, the specific form for a particular credit. The following credit has been placed under a moratorium from June 1, 2010 through June 30, 2011. • Credit for Electricity Generated by Zero-Emission Facilities* The following credits have been placed under a moratorium from June 1, 2010 through December 31, 2011. • Small Business Capital Credit • Rural Small Business Capital Credit The following credits have been placed under a moratorium from July 1, 2010, through June 30, 2012. • Credit for Hazardous Waste Control • Gas Used in Manufacturing Credit • Oklahoma Investment/New Jobs Credit* • Credit for Energy Assistance Fund Contribution • Coal Credit • Oklahoma Agricultural Producers Credit • Credit for Employers Providing Child Care Programs • Credit for Entities in the Business of Providing Child Care Services • Small Business Guaranty Fee Credit • Credit for Manufacturers of Small Wind Turbines • Credit for Food Service Establishments that Pay for Hepatitis A Vaccination for their Employees • Credit for Qualified Rehabilitation Expenditures* • Credit for the Construction of Energy Efficient Homes • Credit for Modification Expenses Paid for an Injured Employee 7 • Credit for Wages Paid to an Injured Employee • Credit for Qualified Recycling Facility • Credit for Qualified Ethanol Facilities • Credit for Qualified Biodiesel Facilities • Oklahoma Local Development and Enterprise Zone Incentive Leverage Act Credit • Poultry Litter Credit • Film or Music Project Credit • Dry Fire Hydrant Credit • Credit for Railroad Modernization • Credit for Breeders of Specially Trained Canines • Credits for Employers in the Aerospace Sector • Credit for Employees in the Aerospace Sector • Credit for Financial Institutions Making Loans Under the Rural Economic Development Loan Act • Credit for Stafford Loan Origination Fee • Research and Development New Jobs Credit Carryover Provisions: Credits established before the moratorium are eligible to be claimed under normal carryover provisions, if applicable. * These credits can be established during the moratorium but will accrue and may not be claimed until tax year 2012. Check-offs: – There are three new check-offs: Support of Folds of Honor Scholarship Program – Individual taxpayers may donate from a tax refund for the benefit of the Folds of Honor Scholarship Program, a nonprofit charitable organization providing academic and vocational training scholarships to dependents of military servicemen and servicewomen who were either killed or wounded in action due to military service in the war in Iraq or Afghanistan. Y.M.C.A. Youth and Government program - Individual taxpayers may donate up to $25 from a tax refund for the benefit of the Oklahoma chapter of the Y.M.C.A. Youth and Government program. Monies donated will be expended by the State Department of Education for the purpose of providing grants to the Program so young people may be educated regarding government and the legislative process. Multiple Sclerosis Society Fund - Individual taxpayers will be provided the opportunity to donate up to $25 from a tax refund for the benefit of the Multiple Sclerosis Society. Monies donated may be expended by the State Department of Health to provide grants to the Multiple Sclerosis Society for the purpose of mobilizing people and resources to drive research for a cure and to address the challenges of everyone affected by multiple sclerosis. Please see the 2010 Legislative Update located on our website for a complete list of all changes. 8 Chapter 2 Federal/State Electronic Filing General Information 2009 Tax Year Electronic filing continues to be very successful. During the 2010 filing season there were over 1 million taxpayers that filed e-file. Direct Deposit refunds were issued in approximately 3 to 5 days and paper refunds in 10 to 12 days. The Tax Commission would like to thank all preparers and software developers for their participation. How Federal/State Electronic Filing Works For the Federal/State Electronic Filing Program (JELF), both the Federal return and the State return must be filed in one transmission to the IRS Service Center. For the Modernized e-File Program (MeF), the Federal and State returns do not have to be transmitted together. The State return can be transmitted after the Federal return is transmitted and has been accepted by the IRS. The Federal and State returns will be linked by including the Submission ID of the Federal return in the State manifest. For both JELF and MeF, the IRS will acknowledge to the transmitter the acceptance of the Federal return and receipt of State data. The State data will then be made available for retrieval by the OTC where it will be entered and processed in the State Income Tax system. How State-only Electronic Filing Option works The Federal return does not have to be electronically filed and accepted before electronically filing the Oklahoma State-Only return. However, the Federal return must be computed before computing the Oklahoma tax return and a copy of the Federal information must be included with the Oklahoma return. Tax preparers will have to indicate in their software that it is a State-Only/Unlinked filing. The IRS will receive the return and the data will be made available for retrieval by OTC. After the data is retrieved, it will be acknowledged and processed by Oklahoma. For both the Federal/State Electronic Filing Program (JELF) and the Modernized e-File Program (MeF), the Federal return does not have to be electronically filed and accepted before electronically filing the Oklahoma State-Only / Unlinked return. 9 Acknowledgement The OTC will acknowledge, in a separate acknowledgement, receipt of the Oklahoma data to the transmitter through the IRS. The transmitter’s acknowledgement should be available within 3 days for JELF and within 24 hours for MeF from the time the return data is received from the IRS Service Center. Who May Participate Federal/State Electronic Filing for Oklahoma returns is available to all interested parties who have been accepted in the Federal electronic filing program and transmit returns to the IRS Service Centers. State-Only/Unlinked Electronic Filing for Oklahoma returns is also available to such interested parties if it is supported by their software. Note: You do not need to register with the OTC. When the IRS approves you for electronic filing of tax returns, Oklahoma automatically accepts you. Mandate All “specified tax return preparers” must file individual income tax returns electronically. This will apply to returns filed after December 31, 2010. The term specified tax return preparer has the same meaning as provided in Section 6011 of the Internal Revenue Code. 10 Chapter 3 Filing an Electronic Return Composition of an Electronic Return In total, an Oklahoma electronic return contains the same information as a comparable return filed entirely on paper documents. An electronic return consists of: * Data transmitted electronically to the OTC using the IRS as a conduit; and * Paper documents (sent directly to OTC) that contain information which cannot be electronically transmitted, such as taxpayer signatures, documents prepared by third parties, etc. This does not include forms or schedules which are not accepted by the electronic filing system. Note: The Oklahoma form 511 requires an accompanying copy of the taxpayer’s Federal return. The vendor’s software will fulfill his/her requirement by copying the Federal data into the unformatted records of the state packet before the return is transmitted to the IRS. Electronic Portion of Returns The following forms and schedules can be transmitted electronically and are considered the electronic portion of the return. Both the MeF and JELF programs support the following forms: * All Federal individual income tax forms and schedules accepted for IRS e-file * Oklahoma Resident Individual Income Tax Return & Schedules (OTC Form 511) * Oklahoma Business Activity Tax form (OTC Form 511-BAT) * Oklahoma Income Tax Other Credits form (OTC Form 511CR) * Oklahoma Credit for Tax Paid to Another State (OTC Form 511TX) * Refund of Sales Tax (OTC Form 538-S) when attached to Form 511 * Refund or Credit for Property Tax (OTC Form 538-H) when attached to Form 511. Only the MeF program supports the following forms: * Oklahoma Part-year and Nonresident Individual Income Tax Return & Schedules (OTC Form 511NR) * Oklahoma Capital Gain Deduction for Residents Filing Form 511 (OTC Form 561) * Oklahoma Capital Gain Deduction for Part-year and Nonresidents Filing Form 511NR (OTC Form 561NR) * Binary Attachments for any supporting documentation (PDFs) 11 Non-Electronic Portion of Returns The non-electronic portion of the return consists of the following: Oklahoma Individual Income Tax Declaration for Electronic Filing (OTC 511-EF), required for all electronic returns, is to be retained by the ERO for 3 years. Copies of forms W-2, W-2G, or 1099-R, which would normally be attached to a paper return, must be attached to the form 511EF and retained by the preparer. ERO’s may be subject to inspection of records by the OTC during the filing season. If a return contains any forms or supporting schedules listed below and binary attachments* are not supported, they should be attached to the 511EF and mailed to the Oklahoma Tax Commission by the taxpayer. These are not part of the electronic record and may be required by OTC. Form OW-8-P-Sup-I - Annualized Income Installment Method for Individuals Form 575 - May 8 or 9, 2003 Tornado Tax Credit Form 511-NOL – Oklahoma Net Operating Loss Form 573 - Farm Income Averaging COFT’s Form – Oklahoma Volunteer Firefighter Tax Credit Form 561 – Oklahoma Capital Gain Deduction Include a copy of other state’s income tax return if Form 511TX is filed Any Oklahoma statements containing additional information Note: The 511EF should be placed on top as a cover page. Do not mail copies of the Oklahoma Income Tax Return, Federal Income Tax return or withholding statements. Only mail the 511EF to the OTC if you have any of the above forms as part of the transmitted tax return. * If binary attachments are supported these forms and /or supporting schedules are attached, as PDFs, to the e-Filed return. 12 Exclusions from Electronic Filing The following types of returns are excluded from electronic filing for tax year 2010: * All returns and schedules excluded from IRS e-file * Returns from preparers, originators or transmitters who have not been accepted into the Electronic Filing Program * Amended returns or corrected returns * Returns for any tax year other than calendar year 2010 if filed through the JELF program * Returns for any tax year other than calendar year 2009 and 2010 if through the MeF program * Returns with dollars and cents entries. Only whole dollars are accepted * Returns containing more than 3 form 511TX (Credit for Tax Paid to Another State) * Returns transmitted after October 15, 2011 if filed through the JELF program (Returns can be transmitted year-round through the MeF program) 13 Chapter 4 Rejected Returns Paper returns, to replace electronic returns that were rejected by the IRS and not resubmitted, are to be mailed to the OTC. The following information is required: * A printout of the return * The original, signed, Form 511EF * State copies of all W-2’s, W-2G’s and 1099-R’s * A cover letter giving the date the return was rejected by the IRS eg: rejected 01/30/11 Mail paper returns to: Oklahoma Tax Commission Carol Shrum – Taxpayer Assistance Division PO Box 269057 Oklahoma City OK 73126-9057 When the paper replacement return is received by the OTC, at the specified address, it will be given priority processing status. Contact Carol Shrum at 405-522-3827 for additional information, or inquiries. Note: If non-qualifying returns are filed electronically, the replacement returns will not be given priority by the OTC The OTC will monitor receipt of replacement returns. Failure to submit paper returns in a timely manner may adversely affect your authorization to file Oklahoma electronic returns. Changes to Electronic Returns: After electronic returns are transmitted, they cannot be recalled or intercepted in process. If the electronic filer or taxpayer wishes to change any entry after a return has been accepted please note the following * An Amended Oklahoma Individual Income Tax Return (511X) must be filed through the normal paper filing process * No action should be taken to change the computation between the date transmitted and the date the OTC acknowledges the return * If an Oklahoma return is transmitted in error, please contact the OTC immediately at (405) 522-5723 or by faxing to (405) 522-2072 Attn: Richard Pachankis. 14 Chapter 5 Form 511-EF Oklahoma Individual Income Tax Declaration for Electronic Filing Form 511-EF is the signature portion of the return. It must be completed and signed* by all appropriate parties before the return is transmitted electronically. The preparer is to keep the 511-EF as documentation. Form 511-EF • Authenticates the return • Authorizes the ERO to file the return electronically on behalf of the taxpayer. Form 511-EF does not serve as a power of attorney or as a substitute for the information required to be provided on the electronic tax return. Use only the official Form 511-EF or an approved substitute which duplicates the official form in format, language, content and size. Photocopies are acceptable as long as they are legible. The following is a sequence of events in the handling of Form 511-EF: 1. An ERO prepares the return and computes the taxes based on the information the taxpayer provides, or accepts an already prepared return for the purpose of electronic transmission. 2. After the return has been prepared and/or before it is transmitted, the taxpayer must verify the information on the return and sign the 511-EF prior to the electronic transmission of the tax return. Both signatures* are required on a joint return. 3. A copy of the prepared return must be provided to the taxpayer. 4. Form 511-EF should be retained by the ERO for 3 years. All EROs will be subject to periodic reviews by the OTC to assure the paperwork is being retained. If supporting schedules are required by the OTC please ensure taxpayer is given a copy of the 511-EF to mail to the OTC along with the supporting documents as mentioned in Chapter 3 Non-Electronic Portion of Returns. Form 511-EF is part of the electronic return for the purposes of taxpayer verification and signature. A blank 511-EF is the same as a blank tax return. • Practitioners are prohibited from allowing taxpayers to sign a blank tax return. • It is permissible to have the taxpayer review the completed tax return on the display terminal. * Entry of the Taxpayer’s Personal Identification Number (PIN) in the electronic filing process operated by the IRS shall service as an “electronic signature”. Entry of the Taxpayer’s PIN as signature will only be allowed on a linked (Fed/State) electronically filed return. Use of a PIN will not be allowed on an unlinked (State Standalone) return. 15 Chapter 6 Refunds Taxpayers have three options when their return shows an overpayment of their tax. They may elect to have their overpayment: * Refunded directly into their financial institution account by electronic transfer (Direct Deposit) Note: Oklahoma will only deposit into one account per tax return. * Refunded to them in the form of a paper refund check, or * Applied to next year’s estimated tax. Direct Deposit offers taxpayers a quicker more convenient way to receive their refunds, reduces the risk of loss, and allows immediate use of the funds upon deposit. Direct Deposit of a refund is not guaranteed. A direct deposit may be denied due to: * Incorrect banking data * Oklahoma income tax due from a previous year * Fines or debts owed to state agencies or IRS (ie: child support student loans, etc) * The estimated tax payments claimed on the return do not match the estimated tax payments recorded by the OTC * Adjustment is made to disallow a credit when the taxpayer was not eligible for it. * Due to changes in the electronic banking rules, the Oklahoma Tax Commission will no longer allow direct deposits to or through foreign financial institutions or if the taxpayer has a foreign address on their tax return. The taxpayer will be issued a paper check. If the taxpayer’s address contains APO or FPO that is not considered a foreign address, direct deposit will be allowed. Although we do not anticipate problems with the Federal/State Electronic Filing program, a refund may be delayed. If a taxpayer owes Oklahoma taxes, fines or a debt to a state agency, the OTC is required by law to apply (off-set) the income tax refund to these balances. Taxpayers should first confirm acknowledgment of their Oklahoma return with their practitioner or transmitter. Tax preparers should wait at least 14 days from the date of acknowledgment for a paper refund or 10 days for a direct deposit before contacting the OTC about their refund. Inquiries may be directed to the Taxpayer Assistance Division at (405) 521-3160 or 1-800-522-8165. 16 Chapter 7 Payment of Balance Due Amounts The taxpayer is responsible for paying the amount due to the OTC when a return is filed or no later than April 20, 2011 if paid electronically.* If the payment is not remitted electronically the amount due must be paid by April 18, 2011. Payment may be made by check, money order, credit card, or direct debit. Checks or money orders should be attached to the 511-V and mailed to the OTC no later than April 18, 2011. Mail to Oklahoma Tax Commission Electronic Filing PO Box 26890 Oklahoma City OK 73126-0890 Do not mail a copy of the tax return with your payment. If the taxpayer is not paying at the time of transmission, give them the completed 511-V to be mailed by April 18, 2011. If the taxpayer is making a partial payment, the form 511-V should be attached to the payment and mailed to the OTC no later than April 18, 2011. A billing coupon will be sent to the taxpayer for the balance due at which time the taxpayer will have the option of paying the remaining balance in full, or making monthly payments until the balance is paid off. Taxpayers who have a tax amount due may choose to have their payment directly withdrawn from their checking or savings account. Taxpayers must supply the bank routing and account numbers, the amount to be withdrawn and the date the funds are to be withdrawn. No form 511-V is required. The payment must be made no later than April 20, 2011. Credit Cards accepted are Discover, Master Card, Visa and American Express. Credit card payments may be accessed via the OTC web site. The taxpayer would click on links “payment options” and then “Credit Cards” on the OTC website at www.tax.ok.gov or by calling 1(866)289-0455. Please be aware a convenience fee will be added to the transaction. The payment must be made no later than April 20, 2011. The taxpayer can choose to have their payment directly withdrawn from their checking or savings account via the OTC website. The taxpayer would click on links “payment options” and then “E-Check” on the OTC website at www.tax.ok.gov. The payment must be made no later than April 20, 2011. *Warning! Due to changes in the electronic banking rules, the Oklahoma Tax Commission will no longer allow direct debits from or through foreign financial institutions. If the taxpayer uses a foreign financial institution they will be required to pay by check, money order or credit card. 17 Chapter 8 Information Electronic Filers Must Provide to the Taxpayer The ERO must furnish the taxpayer with documentation of all completed Oklahoma forms and schedules filed for the taxpayer. This documentation may be furnished on official Oklahoma forms, on copies of official forms, or on software designed forms that have been approved by the Oklahoma Tax Commission. These should be provided to the taxpayers at the time they sign form 511-EF. * The completed Oklahoma Individual Income Tax Declaration for Electronic Filing ( 511-EF) * Other documents containing required signatures * Any other documents which are not Oklahoma forms or schedules. The ERO should advise the taxpayer to retain copies of : * Forms W-2, W-2G’s, 1099-R * Any other documents, not required by OTC which the taxpayer voluntarily included with the form 511-EF as supporting material * The signed form 511-EF The ERO will also retain the 511-EF and copies of the W-2s etc for 3 years. If an electronically filed return was acknowledged as accepted by the OTC, the ERO should advise the taxpayer to wait 1 week from the acknowledgment date before making an inquiry about his/her refund. If an individual should find it necessary to contact the OTC regarding his/her income tax refund, they may do so by calling the Taxpayer Assistance Division at (405) 521-3160 or 1-800-522-8165. * The taxpayer will be required to furnish his/her (and spouse’s if applicable) social security number(s) * The taxpayer should be prepared to provide bank information if direct deposit was requested. 18 Chapter 9 Responsibilities of Electronic Filers The guidelines in IRS Publications 1345 and 3112 must be followed for Oklahoma Electronic Filing. Penalties for Disclosure or Use of Information Guidelines outlined in Section 6, IRS Revenue Procedure 93-8 should be followed, as well as Title 68, Section 205 Oklahoma Statutes. Penalties for Late Filing, Late Payment and Fraudulent Returns This provision provides due notice that all penalties, interest and criminal provisions which are applicable for paper returns, are also applicable for electronic returns. Specifically, penalty and interest on tax for late filing and/or late payment will be assessed. Penalties will be assessed for any person filing a fraudulent or misleading return. Additionally any person who willfully subscribes or presents a fraudulent return will be subject to prosecution and the penalties. * Other criminal provisions will be applicable to the extent that a person attempts to commit forgery and falsify signatures on any electronic filing form or check * Any attempt to pass bad checks for payment of taxes will be prosecuted. Advertising Standards Guidelines in IRS Publications 1345 and 3112 and Revenue Procedure 93-8, Sec 12.01 through 03 and 05 through 09 must be followed as though references to the IRS or Service were references to the OTC, State of Oklahoma, or the State and references to the FMS or Treasury Seals were references to the State of Oklahoma Seal. Monitoring and Suspension of an Electronic Filer The OTC will monitor electronic filers for conformity to this publication. The OTC can recommend suspension of an electronic filer for due cause through the local IRS District Office Coordinator. Note: Warning letters, suspension and rejection from electronic filing will be administered by the local IRS District Director. 19 For questions or inquiries please contact: Joan Korthanke (405) 521-3637 Email: jkorthanke@tax.ok.gov Or Richard Pachankis (405) 522-5723 Email: rpachankis@tax.ok.gov In State Toll Free 1-800-522-8165 ext 13637 Fax: (405) 522-1711 Email: efile@tax.ok.gov |
Date created | 2011-10-03 |
Date modified | 2011-10-27 |
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