E-file Mandate FAQs
This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (DOR) until amended. A guidance document does not include internal procedural documents that only affect the internal operations of DOR and does not impose additional requirements or penalties on regulated parties or include confidential information or rules and regulations made in accordance with the Administrative Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on regulated parties, you may request a review of the document.
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Why is e-file required?
In 2009, the Nebraska Legislature enacted the e-file mandate for tax preparers because e-filed returns cost less to process, contain fewer errors, and result in faster refunds to those taxpayers due refunds.
What types of returns must be e-filed under the law?
The e-file mandate for tax preparers currently applies to individual income tax, corporate income tax, and partnership returns.
The e-file mandate may be extended to other tax programs in the future.
Who is exempt from the e-file mandate?
The mandate does not apply to tax preparers who are not paid, such as the IRS Volunteer Income Tax Assistance Program (VITA), or American Association of Retired Persons (AARP) preparers. However, DOR encourages all tax preparers to e-file returns they prepare even if they are not required to do so.
What if a taxpayer does not want to e-file?
Taxpayers are not required to e-file their individual income tax, corporate income tax, or partnership returns, but are still strongly encouraged to do so. Taxpayers who do not want the paid preparer to e-file their returns must complete a Nebraska E-File Opt-Out Record for Individuals Nebraska E-File Opt-Out for Corporations and Partnerships. This form is retained by the preparer.
What if I have multiple offices that each file less than 25 returns?
Regardless of the number of returns prepared at each location, if you or your business locations collectively prepared 25 or more returns in the prior calendar year, ALL returns prepared and filed by you or your other business locations in the current calendar year must be e-filed.
What if my client wants to e-file tax returns in several states, and my software does not have that capability?
Check with your software provider to see if you can submit the Nebraska return as a “state only” or “unlinked” filing. If so, you may e-file the Nebraska return separately from the federal return.
If your software does not offer a “state only” or “unlinked” filing option, you may use DOR’s NebFile system to file your client's Nebraska individual income tax return. The NebFile system only allows a filing for a Nebraska resident that meets other eligibility requirements.
If neither of these options are available, you must seek a hardship waiver from the Tax Commissioner (see question below for more information).
Is there a penalty for failing to e-file a tax return when required?
Yes. A tax preparer may be fined $100 for each return that is not e-filed.
Can I ask to remove the penalties imposed for failing to e-file?
Yes. You may file a Request for Abatement of Penalty, Form 21. DOR will only abate the penalty under limited circumstances.
Are there any circumstances where the e-file mandate may be waived?
Yes, a tax preparer may submit a written request for a hardship waiver from the Tax Commissioner. The Tax Commissioner will only grant hardship waivers in cases where a tax preparer would be unduly burdened by the e-file mandate. Waiver requests will be evaluated and approved or denied on a case-by-case basis, and must be requested annually for review.
What is required for a tax preparer to e-file a prepared tax return?
A tax preparer must register with the Internal Revenue Service (IRS) as an Electronic Return Originator (ERO) to electronically file tax returns with the IRS and the State of Nebraska. For additional information, visit www.irs.gov.
In addition, an ERO must use software that has been tested and approved by both the IRS and DOR to file a return electronically. For additional information on approved software, click here.
What if the software I use does not support e-filing?
You are responsible for purchasing software that will allow you to meet the mandate requirements.
Where can I find software that supports Nebraska e-file?
If there are required attachments, must those returns still be e-filed? If so, will there be additional procedures regarding the attachments?
Yes, state returns must be e-filed when possible, even if there are required attachments. For various credits and deductions, DOR requires certain forms and other documents to be filed with the return. In some cases, these are low-volume forms that e-file software products do not support. Required supporting documentation may be submitted as an attached PDF document when e-filing your return if your software supports these types of attachments. If the supporting documentation is not received with the return, DOR may request the required documentation during the processing of your return. Income tax refunds may be delayed if all required documentation is not received with the e-filed return.
What if I am denied participation in the IRS e-file Program?
If the IRS does not allow you to participate in the IRS Federal/State e-file program, you may apply to the Tax Commissioner for a hardship waiver.