Most states participate in this program, which is a major convenience for employers. Under this program, the IRS shares 1099* data with the appropriate states — automatically. That way, you’re saved the extra step of state filing.
These are the states that participate in the CF/SF program: AL, AR, AZ, CA, CO, CT, DE, GA, HI, ID, IN, KS, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NJ, NM, NC, ND, OH, OK, SC, VT, WI.
If a state isn’t part of the combined program and the state requires you to submit the form, then it’s your responsibility to file the 1099-MISC directly with that state. It’s two separate returns and two separate processes.
These states require direct filing: IA, Il, KY, NY, OR, PA, RI, UT, VA, WV.
If you’re an employer filing in one of these states, you’re required to report 1099* data with the federal government only.
These states are: AK, FL, NV, NH, SD, TN, TX, WA, WY.
*This information refers to these forms that are available for e-filing:
When it comes to filing taxes, whether at the federal or state level, you want to be certain you’re accurate and on time. Late filing of mandatory 1099s could lead to penalties ranging from $50 to $260 per 1099, with a maximum of $1,064,000 a year for your small business.* The amount of the penalty is based on when you file the correct information return and/or furnish a correct payee statement, as follows:
Penalties for not filing correct information returns apply if you:
Penalties for not furnishing correct payee statements apply if you:
Keep in mind that the penalty to file a correct information return is separate from the penalty for not furnishing the correct payee statement. Because of this, you could incur two separate penalties.
*In all cases, the IRS considers you to be a small business if you’ve earned an average of $5 million or less in annual revenue for the past three tax years.