Maryland MeF Test Package for Authorized e-file Providers

Transcription

1 2013 Maryland MeF Test Package for Authorized e-file Providers for Individual Resident and Nonresident Income Tax Returns October 2013 Revenue Administration Division Annapolis, MD Peter Franchot, Comptroller

2 What is Modernized e-file The Modernized (MeF) system is an internet based Federal/State electronic filing platform. MeF uses the widely accepted Extensible Markup Language (XML) format. New for Tax Year 2013 New software designations Basic or Comprehensive Support for e File of Amended Returns (Form 502X and Form 505X) New e File Requirement for Business Tax Credits on Form 500CR All individual income tax returns are due April 15, 2014 Talbot County local tax rate increased from.0225 to.0240 Anne Arundel County local tax rate increased from.0249 to.0256 Wicomico County local tax rate increased from.0310 to.0320 Pension exclusion changed to $27,800 New Itemized Deductions Limitations Worksheet for Form 502 and Form 505 Form EL102B will now have barcode New Line 1b on 502 and Line 3a of 505NR for Earned Income Form 502H has been eliminated New subtraction code mm on Forms 502SU and 505SU Form 502CR Part E Long Term Care Credit changed to $360 for age 40 or less New Part G 502CR Health Enterprise Zone Hiring Tax Credit 2

3 Maryland announces Basic and Comprehensive Software Designations There will be a significant change in the e file software approval process for Maryland for Tax Year Beginning January 1, 2014, the Comptroller of Maryland will designate Software Vendors Maryland products as either Basic or Comprehensive. The Comprehensive designation will be given to those companies who support all electronic forms, PDF attachments and Amended Returns: all others will be given the Basic designation. These designations will help taxpayers and tax professionals determine which software will best fit their needs. The Comptroller s webpage ( will maintain a current list of software vendors approved for each designation. Starting January 2014, the State of Maryland will support electronic filing of Tax Year 2013 Amended Business Returns (Form 502X and Form 505X) for original returns which have already been filed and processed. We do not support a Financial Transaction with Amended returns. For detailed information, schemas, business rules and Amended instructions for Form 502X and Form 505X, visit the Comptroller s webpage at 3

4 Contact information for e-file Help Desk Website Telephone number Fax number Authorized e File providers needing assistance may contact the Maryland e File Help Desk anytime by telephone, Monday through Friday, between 8:00 a.m. and 5:00 p.m. E.S.T, or fax. The Comptroller s website contains downloadable state forms and other information for Individual Resident and Nonresident income tax returns. Publications The following publications are available for your assistance and may be printed or downloaded from our website at Maryland MeF Handbook for Authorized e File Providers, Test Package, Schemas and Business Rules Maryland Individual Resident and Nonresident instruction booklets 2013 Maryland Amended Individual Income Tax Forms (502X and 505X) and Instructions 4

5 What Can Be Transmitted Electronically The Maryland e File return consists of XML data and supporting PDF documents. Software Developers are encouraged but not required to support all forms and PDF s. However, PDF attachments are important to Return Preparers as many certifications have required supporting documents and certifications for certain credits that must be provided with the e file return. There is also a new requirement for all credits claimed on the 500CR are to be filed electronically. A form with an asterisk (*) is considered required. All other forms are optional at the discretion of the software developer including binary attachments(pdf s). Below is a list of electronic Maryland forms: Form 502* Full and Part Year Maryland Resident Income Tax Return Form 505 Full and Part Year Maryland Nonresident Income Tax Return Form 505NR Maryland Nonresident Income Tax Calculation (505 only) Form 502CR Income Tax Credits for Individuals Form 502UP Underpayment of Estimated Maryland Income Tax by Individuals Form 502INJ Injured Spouse Claim Form 1099G/MD Unemployment Compensation Form 502SU Maryland Subtractions from Income (502 only) Form 505SU Maryland Subtractions from Income (505 only) Form 502B Maryland Dependents Information Form 588 Direct Deposit of Maryland Refund to More than One Account Form 510 Schedule K 1 Maryland PTE Entity Member Information 5

6 Form 500CR Maryland Business Income Tax Credit Form 502S Maryland Sustainable Communities Tax Credit Form 500DM Maryland Decoupling Modification Form 502X Maryland Amended Resident Income Tax Return Form 505X Maryland Amended Nonresident Income Tax Return Accepted Federal Forms The following forms can be filed depending on the type of Maryland filing submitted: Form W 2 Wage and Tax Statement Form W2 G Statement for Certain Gambling Winnings Form 1099R Retirement Distributions Additional Documents Additional documents that e File MeF software must generate: Maryland Form EL102 Payment Voucher for filers with a balance due Maryland Form EL101 Maryland Income Tax Declaration 6

7 Binary Attachments (PDFs) Binary attachments (PDFs) are strongly encouraged and accepted by MRAD. The Reference Document ID attribute should link the attachment to the appropriate location on the return. PDFs are important to Return Preparers as there are many required supporting documents and certifications for certain credits that must be attached with the Maryland return. Note: EROs should take into consideration which forms and attachments they desire to be filed electronically, and verify with the software vendor which forms they support when purchasing software. General Information Maryland Individual Resident and Nonresident income tax returns are due April 15th. If filing a return for a fiscal year, the due date is the 15 th day of the fourth month following the close of the fiscal year. If any due date falls on a Saturday, Sunday or legal holiday, the return is due the next business day. If the return is timely filed electronically, the taxpayer can choose a debit date up to April 30 th. Payments made by check, money order or other methods are due by April 15 th. An electronic payment for returns filed after April 15 th are due the date of submission. The Maryland MeF program requires all tax software developers and transmitters to test for accuracy, to ensure their software adheres to Maryland schemas and business rules to ensure successful transmission and receipt of acknowledgements. Maryland is tentatively scheduled to open for testing in November 2013 for tax year 2013, in conjunction with the IRS. Software Developers may submit test returns through 2014 until the IRS MeF test system shuts down, the e File Help Desk will not assist with reject code analysis with testing or approve any vendor 7

8 for tax year 2013 after May 31, Software companies new to MeF processing are required to contact the e File Help Desk to obtain a Maryland Software Identification (MSID) Number. Each software package developed must have a unique MSID hard coded into the product for identification purposes. Acknowledgments will be sent to the Fed/State Acknowledgment System for both testing and production. The IRS and Maryland will accept ITIN/SSN Mismatch Returns (returns filed with an ITIN Individual Taxpayer Identification Number where the associated W 2 form shows wages reported under a valid social security number). A return filed with a valid ITIN (the first digit is 9, and the forth and fifth digits range from 70 88, 90 92, or ) cannot claim EIC (earned income tax credit) or REIC (refundable earned income tax credit). Returns transmitted for testing must always be identified with the social security numbers indicated for each test return in this package ( through ). For testing additional conditions during testing or production, test SSNs through should be used. Test returns can be transmitted as many times as needed using only the designated test social security numbers provided by Maryland. The entire set of test returns must be submitted together and acknowledged as accepted before final approval. The following paper documents must be submitted before final approval by either efil@comp.state.md.us or faxed to the attention of the e File Help Desk at EL101 Maryland Income Tax Declaration for Electronic Filing. EL102 Income Tax Payment Voucher if not paying by direct debit. A copy of the acknowledgement received for your final test. A copy of the Maryland PIN Disclosure Statement provided to taxpayers from your Online Software Product (Online Software Providers Only). After you have transmitted the entire test package error free and have submitted all required paper documents for approval, contact the e File Help Desk. Do not transmit any production returns until you have received final approval. Maryland reserves the right to suspend testing any time for good cause. Reasons for suspension include lack of progress in testing, failure to comply with instructions and continued failure to meet state specifications and requirements. Such suspension would be subject to appeal in writing (See 2013 Maryland MeF Handbook for Authorized e File Providers). 8

9 Maryland Acknowledgements Accepted This acknowledgment indicates the electronic return was received and successfully completed the pre entry validation process. No further action is required regarding the transmission. Rejected This acknowledgment indicates the electronic return was received but failed to complete the pre entry validation process (it failed schema requirement or any of the business rules), the transmitter receives an acknowledgement from MRAD with error description(s). The acknowledgment contains codes and error descriptions indicating the cause of the rejection. The error condition must be corrected and the return can then be re transmitted as a State Only transmission. Accepted with Alert This acknowledgment indicates the electronic return was received and successfully completed the validation process. No further action is required regarding the transmission. Alerts identify return conditions for the transmitter, software developer or taxpayer that do not result in the rejection of the electronic portion of the return. However, alerts are important as they may contain information requiring the taxpayer or return preparer to submit additional documentation that would affect the processing of the return in the back end accounting system. Note: If your return is Accepted with Alert, do not resubmit. Special Notes The current year Maryland MeF Handbook for Authorized e File Providers should be used for general system instructions. Also, refer to Maryland Schemas and Business Rules to determine the data validations and error messages. 9

10 Who Must Test The Maryland e File program requires all tax software developers and transmitters to perform successful testing within this test package before being accepted for tax year Software Developer testing will coincide with IRS ATS. Software companies must receive prior approval before submitting their first test returns by contacting the e File Help Desk. What is Tested Return Type 502 Maryland Resident Income Tax Return (Full and Part Year Residents) This test package contains 8 Maryland Resident (502) returns with varying forms. Software Developers and Transmitters must submit 8 test returns together. Return Type 502X Maryland Resident Amended Tax Return This test package contains 2 Maryland Amended Tax (502X) returns. Software Developers and Transmitters must submit 2 test returns together. Return Type 505 Maryland Non Resident Income Tax Return (Full and Part Year Individuals) This test package contains 5 Maryland Non Resident (505) returns with varying forms. Software Developers and Transmitters must submit 5 test returns together. 10

11 Return Type 505X Maryland Non Resident Amended Tax Return This test package contains 1 Maryland Non Resident (505X) return. Software Developers and Transmitters must submit 1 test return. Return Form Type 502D Maryland Personal Declaration of Estimated Income Tax and 502E Maryland Application for Extension to File Personal Income Tax Return This test package contains 2 Maryland Personal Declaration of Estimated Income Tax forms and 2 Maryland Application for Extension to File Personal Income Tax forms. Software Developers and Transmitters must submit 4 test forms together. 11

12 Online Filing of Tax Returns For Online filing, all test returns need to be submitted, even if your software has already been approved for Regular Fed/State filing. For Resident Online testing you will need to submit 8 returns and for Nonresident Online 5 returns. When supporting Forms 502D and Form 502E, then send 2 of each. Online Filing Consent to Disclosure and Perjury Statement Taxpayers who file a Maryland return using Online Tax Software (either packaged or online) must be given the option of either signing their return electronically or on paper Form EL101. To sign electronically, the taxpayer will use the same five digit self selected PIN used when they signed their Federal return. Online software must include the following statement and provide to the online taxpayer upon completion of the Maryland return prior to electronic transmission: Before e Filing your return, you must read and agree to the Maryland Return Signature presented below. This legal agreement allows Maryland and Name of Software Company to process your return electronically. Under penalties of perjury, I declare that I have examined this return, including any accompanying statements and schedules and, to the best of my knowledge and belief, it is true, correct, and complete. I consent to allow my Intermediate Service Provider, Transmitter, or Electronic Return Originator (ERO) to send my return to the state of Maryland and to receive the following information from the state of Maryland: 1.) acknowledgment of receipt or reason for rejection of transmission; 2.) refund offset; 3.) reason for any delay in processing or refund; and, 4.) date of any refund. I am signing my Maryland Tax Return by entering the same five digit Self Select PIN that I used for my federal return filing. 12

13 Test Scenarios Scenario # 1 SSN Mr. Leo Tolstoy resided in Talbot County, MD. He files Single, his income is below the minimum filing requirement and considered non taxable for Maryland purposes. His W 2 indicates Maryland withholding. Mr. Tolstoy would like his refund direct deposited into his savings account. Transmit Form 502 and W 2. Scenario # 2 SSN Mr. Mark Twain resided in Baltimore City, MD. He files Single and his net income is below Maryland s minimum filing requirement, but is taxable because his gross business income is above the minimum filing requirement. He is taking the standard deduction method. Mr. Twain paid estimated payments during He requests a portion of his refund be applied to 2014 estimated tax and the remaining balance should be direct deposited into his checking account. Transmit Form 502 and W 2G. 13

14 Scenario # 3 SSN Mr. Lewis Carroll resided in Baltimore County, MD. He files as a Qualifying widower with 3 dependent children and one other dependent over 65. He is taking the standard deduction method. Mr. Carroll claims Earned Income Tax Credit and [Poverty Level Credit (state and local) or Refundable Earned Income Tax Credit]. His Federal Adjusted Gross Income is less than $50,000. He will receive a refund. Transmit Forms 502, 502B, W 2, and 1099 G. Scenario # 4 SSN and SSN Mr. & Mrs. Jack and Jill London resided in Wicomico County, MD and file a joint return and were residents for a portion of the year. They take the itemized deduction method. Mr. & Mrs. London s joint income is above $178,150. Mr. London had 2 employers and they withheld Maryland taxes. Mrs. Gymnastics had 1 employer and they also withheld Maryland taxes. Their joint filing results in a balance due. They will submit a partial payment of their balance due by direct debit from their checking account on 04/15/2014. Transmit Form 502 and 3 W 2s. 14

15 Scenario # 5 SSN Ms. Margaret Mitchell moved from Pennsylvania to Prince George s County, MD during 2013 and is filing a part year return. Both of her employers withheld Maryland taxes. She files as Head of Household with 4 dependents. Ms. Mitchell s is taking the standard deduction method. Her filing results in a balance due > $500 which is being paid in full by direct debit from her savings account on 4/30/2014. Underpayment (502UP) interest was developed. Transmit Forms 502, 502B, 2 W 2s, and 502UP. Scenario # 6 SSNs and Mr. Charles Dickens resided in Anne Arundel County, MD. He files as Married Filing Separately and is over 65. He is taking the itemized deduction method. Mr. Dicken s is taking a tax credit on 502S for a project completed in The application for this project was submitted after June 1, He claims Tax Credits for Income Taxes paid to two (2) other states and is also taking the Health Enterprise Zone Practitioner Tax Credit. He requests his refund to be direct deposited into his savings account. Transmit Forms 502, W 2, 502S, and 1 502CR with 2 Parts A and Part G. 15

16 Scenario # 7 SSNs and Mr. & Mrs. Mary and Mark Shelley resided in Queen Anne s County, MD and file a joint return. He is over 65, he received retirement income and was also employed. He is claiming the maximum pension exclusion. She works for the State of Maryland and has State Pickup on her W 2. They are claiming the mm subtraction. They are taking the standard deduction method. Transmit Forms 502, 502SU, 2 W 2s, and 1099 R. Scenario # 8 SSNs and Mr. & Mr. Edgar and Allan Poe resided in Montgomery County, MD and they file a joint return. Their Maryland Taxable income is between $175,000 and $225,000. Edgar is under 40 years old and claims the Long Term Care Insurance Credit. They are claiming a tax credit on Form 500CR, Part P based on K 1s issued to them as a pass through entity member. They both have W 2s with Maryland withholding. They file a Form 502INJ as Edgar is an injured spouse. They are taking the standard deduction method and file Form 500DM with both an addition and subtraction modification. They request their refund to be direct deposited to their checking account. Transmit Forms 502, 500DM, 2 W 2s, 502INJ, 502CR, 500CR, and 510 Schedule K 1. 16

17 Scenario # 9 SSN Mr. Jules Verne resided in New York all year. He files as Head of Household and has dependent children. Mr. Verne s AGI Factor is greater than and less than He is taking the standard deduction method. He is taking a subtraction modification ( mm ) on Form 505SU. He files Form 500DM for either an addition or subtraction modification. He is claiming Earned Income Credit (state and local) and Refundable Earned Income Credit or Poverty Level Credit (state and local). Mr. Verne will receive a refund. Transmit Forms 505, 505NR, W 2, 502B, 500DM, and 505SU. Scenario # Mr. Jonathan Swift resided in New Jersey is filing Single. He worked in New Jersey and had Maryland taxes withheld in error. He has no tax liability to Maryland. He takes the standard deduction and will receive a full refund. He requests his refund to be direct deposited into his checking account. Transmit Form 505 and W 2. 17

18 Scenario # 11 SSN Ms. Beatrix Potter is a Delaware resident who worked in Ocean City, MD. She is filing Single and is over 65. Her income is below the filing requirement and is considered nontaxable for Maryland purposes. Her employer withheld Maryland taxes. Her AGI factor is She is entitled to a full refund. Transmit Forms 505 and W 2. Scenario # 12 SSNs Mr. William Shakespeare resided in Minnesota all year and is filing as a Qualifying widower with 2 dependents, one is a Foster Child. He is taking the standard deduction method. His net income is below Maryland filing requirements, but is taxable because his business gross income is above the filing requirement. He has Maryland additions to income. His AGI Factor is His filing results in a balance due which will be paid by direct debit from his checking account on 04/30/14. Transmit Forms 505, 505NR and 502B. 18

19 Scenario # 13 SSNs and Mr. & Mr. Henry and Wadsworth Longfellow resided in Colorado and they file a joint return. They have some non Maryland income on line 16 and an adjustment to income from their federal return. Henry is a pass through entity member and had non resident taxes paid on his behalf. Their taxable income is greater than $175,000. They are taking the itemized deduction method. Transmit Forms 505, 505NR and 510 Schedule K 1. Scenario #14 SSN Mr. H. L. Menken is submitting a 2014 estimated payment using Form 502D. Transmit Form 502D with a debit request. Scenario #15 SSNs and Mr. & Mrs. Horatio Alger Jr. and Ana Alger are submitting a 2014 estimated payment using Form 502D. Transmit Form 502D with a debit request. 19

20 Scenario #16 SSN Mr. Ernest Hemingway is submitting an extension to file on Form 502E with a payment. Transmit Form 502E with a debit request. Scenario #17 SSNs and Mr. & Mrs. O and A Henry are submitting a request for extension to file without a payment on Form 502E. Transmit Form 502E without a payment. Amended Test Scenarios Amended Scenario #1 SSN Mr. Thomas Paine resided in Anne Arundel County, MD and are filing an Amended Return on Form 502X as married filing joint with dependents. Mr. Paine was a part year resident and is increasing his Federal Adjusted Gross Income on Line 1 as he received a W2 from an ex employer late. He also is increasing his itemized deductions on Lines 7 through 9. He includes the explanation of changes on Part III page 2 of Form 502X. He incurs a balance due. Transmit Forms 502X, 502B, W2 and an XML of the Federal Form

21 Amended Scenario #2 SSNs and Mr. & Mr. Edgar and Allan Poe resided in Montgomery County, MD and are filing an Amended Return on Form 502X. They are decreasing their income below $150,000 due to late investment loses. They do not change their deductions from standard. They are taking an additional 500CR credit on Part L, Line 19. They will receive a refund. Transmit Forms 502X, 500CR and a PDF of the Federal Form Amended Scenario #3 SSN Mr. Oscar Wilde resided in Delaware and is filing Head of Household with dependents. He is filing an Amended Form 505X. Oscar is adding a dependent because he had not received his infant child s social security number before he filed the original return. Therefore his earned income credit increased and so will the refundable earned income credit. He will receive an additional refund. Transmit Forms 505X, 505NR, 502B and a PDF of the Federal Form 1040a. 21