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E-file mandate penalties for tax preparers

Penalties for failure to comply with the e-file mandate 

  • If you don't file and pay electronically when required to do so, the department may impose penalties on both you and your clients.
  • If you file a paper document that you were required to file electronically, your client may be subject to the failure-to-file a return or report penalty for that tax type.
  • Any overpayment claimed on a paper tax document that was required to be filed electronically won't be eligible to receive interest until it's filed electronically.

Penalty amounts for tax preparers

If you:

  • fail to e-file one or more tax documents, you are subject to a $50 penalty per document, unless you can document reasonable cause for not e-filing.
  • charge a separate fee to e-file, you are subject to a $500 penalty the first time you charge and a $1,000 penalty for each subsequent charge.

Penalty amounts for business clients

If your business clients:

  • fail to e-file one or more tax documents, they are subject to a $50 penalty per document.
  • fail to electronically pay any taxes, fees, or other amounts they owe to the department, they are subject to a $50 penalty per payment.

Note: These penalties can't be imposed upon individual income tax clients or individual income tax self-filers.