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Combined State and Federal 1099 Filing

Last Updated:
January 3, 2018

A select number of states allow the IRS to automatically transmit the 1099 information to them once it's been filed. This service is only available if you file electronically. And like filing electronically, it’s not as simple as just emailing the IRS. Filers have to first apply and become approved by the IRS to submit specially formatted files to their FIRE system.

Who should do combined state and federal filing?

Companies expecting to file electronically in one or multiple states should consider participating in the program.

What do I need to prepare in order to participate in the program?

The information reported to states in combined filing is the same as what is reported to the IRS. With combined filing, the IRS simply forwards the information to the state — saving you and the state tax agency time. But the filings must be formatted according to IRS specifications and use the state’s special code.

When filing a 1099 in multiple states for the same payee, filers need to create what’s known in the electronic format as a B Record for each state. This also means that the filer will have to specify how much was paid to the recipient in each state. The total amount paid to the recipient can’t simply be reported to each state. For example, if a contractor worked between two states, you need to divide the total amount paid to the contractor based on when they worked in either state.  

Also, the IRS notes, “some participating states require separate notification that the payer is filing in this manner. The IRS acts as a forwarding agent only. It is the payer’s responsibility to contact the appropriate state(s) for further information.”

What if my state doesn’t participate in the program?

Check with your state’s tax collection agency or your accountant to better understand your information withholding and reporting obligations.

See more information about the State 1099 Tax Requirements

Which states participate in the program?

These states participate on the combined Federal/State 1099 filing program:

Payable takes care of e-filing 1099s for states that participate in combined federal and state filing. 

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