Mississippi department of revenue



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MISSISSIPPI

DEPARTMENT OF REVENUE




Modernized E-File Guide

For

Individual Income Tax

And

Fiduciary Income Tax

(For Estates and Trusts)


Revised January 01, 2016

Table of Contents

Individual and Fiduciary Income Tax

Introduction 3

Calendar 4

Changes for Tax Year 2014 5

Contact Names and Phone Numbers 7
Getting Started

How the Federal/State e-file Program Works 8

How the State Only e-file Program Works 8

Who May Participate 9

The Application and Acceptance Process 9

Mississippi Testing 10

Publications 11
The Filing Process

What Can be Transmitted Electronically 12

What Cannot be Transmitted Electronically 12

Form MS 8453 13

Attachments to the MS 8453 14

Corrections to Form MS 8453 15

The Transmission Process 15

Mississippi State Acknowledgements 16


Other Situations

International ACH Transactions (IAT) 17

Refund Returns 17

Direct Deposit 17

Balance Due Returns 20

Responsibilities of Software Developers and Transmitters 21

State Submission Types 21
Responsibilities of Preparers and EROs 21

Reminders 22


E-file Checklist 23
County Code Conversion Table 25

Error Codes 26



Introduction
The Mississippi Department of Revenue offers tax preparers the ability to electronically file individual and fiduciary income tax returns through the Modernized E-File System (Mef). The Department of Revenue accepts refund, zero balance due, and balance due returns. Mississippi’s Mef program is a part of the Federal e-file Program operated by the Internal Revenue Service.
The Mississippi Mef Handbook for Individual and Fiduciary Income Tax Returns (hereinafter referred to as the Mississippi MeF Handbook) is designed to be used as a companion to the Internal Revenue Service Publication 4164. Since most functions of the Mississippi Mef Program are the same as the Federal e-file Program, this handbook highlights the special and unique features of the Mississippi program. All rules and regulations governing tax preparers, transmitters, and originators of returns put forth by the Internal Revenue Service are in effect for the Mississippi Department of Revenue. The procedures and requirements for the Federal e-file Program are outlined in Publication 3112, The IRS e-file Application Package.
The Mississippi Department of Revenue requires all participants to be accepted into the Federal Mef Program in order to participate in the State Mef Program. The DOR recommends that all participants study Publication 4164 prior to reading the Mississippi Handbook. Where the Internal Revenue Service provides detailed instructions on hardware, transmission procedures, policies, etc., those same requirements apply to the Mississippi program.
The Mississippi Department of Revenue is looking forward to your participation in our Mef program.
E – file Calendar

(All dates include State Only filing)

Begin Transmitting Returns to IRS/DOR…………………………January 2016

(Concurrent with Federal Program)
Begin IRS/State Acceptance Testing ……………………….… November 1, 2015
Deadline for Submitting Initial ATS……………………………….. January 7, 2016
Deadline for Approval………………………………………………January 17, 2016


Last Date for Timely Filed Returns……………………………………April 18, 2016

(Concurrent with Federal Program)
Last Date for Extended Filing of State Returns…………………October 15, 2016
Last Date for Retransmission of Rejected Returns………….…October 20, 2016
Note: Dates may be subject to change. See IRS Pub 4164 for current electronic filing calendar.

Changes for Tax Year 2015

Mississippi is requesting additional information this filing season in an effort to combat stolen-identity tax fraud to protect you and your tax refund. If you have a driver's license or state issued identification card, please provide the requested information from it. The return will not be rejected if you do not provide a driver's license or state-issued identification. Providing the information can only help process the return more quickly


Code Ann. §27-7-51, 27-7-53, 27-7-315, 27-7-327 and 27-7-345
Reduce the interest rate from 1% to 1/2% per month over a five year period. The interest rate reduction is as follows:

Effective January 1, 2015

9/10th of 1%

Effective January 1, 2016

8/10th of 1%

Effective January 1, 2017

7/10th of 1%

Effective January 1, 2018

6/10th of 1%

Effective January 1, 2019

½ of 1%


House Bill 33
Authorizes an income tax credit for taxpayers that employ persons who are honorably discharged veterans who served on active duty in the armed forces of the United States on or after September 11, 2001, and who have been unemployed for six consecutive months immediately prior to being employed by such taxpayers. Any unused veterans credit claimed under House bill 33 can be carried forward for five consecutive years from the close of the tax year in which the credit was earned. This bill takes effect January 1, 2016.
Code Ann. §27-7-15
This bill authorize taxpayers to establish Catastrophe Savings accounts to pay the amount of insurance policy deductibles and other uninsured portions of risks of loss to the taxpayer’s legal residence from a hurricane, flood, windstorm or other catastrophic event. To provide that the amounts contributed to and distributions from a Catastrophe Savings account used to pay qualified catastrophe expenses shall be excluded from the taxable gross income of the account holder. To provide that any state income tax paid that is attributable to a taxable distribution from a Catastrophe Savings account shall be increased by two and one-half percent of the amount of the distribution that is includable in the taxable gross income of the taxpayer. This bill went into effect January 1, 2015.

Code Ann §27-7-308

Provide that in a sale of real property and associated tangible personal property which is not considered an exchange or trade of such property and which results in gross proceeds greater than $100,000.00 paid by the buyer to the seller and owned by a nonresident. The seller, rather than the buyer, shall be responsible for paying over to The Department of Revenue an amount equal to 5% of the amount realized by the seller. This bill went into effect July 1, 2015.


MARRIED AND SAME-SEX MARRIAGE
Pursuant to the U. S. Supreme Court decision authorizing same-sex marriages, the Mississippi Department of Revenue will accept "married filing jointly" income tax returns filed by same-sex couples. For tax years within the statute of limitations (three years from the due date of the return or

three years after the granted extension date), amended returns will be accepted for married same-sex couples who originally filed "single" returns to file as "married filing jointly".


Unlinked/State Only Returns
Mississippi will no longer accept unlinked/state only returns for the 1040 E-file Program. The Mississippi 1040 E-file return must be link to a Federal 1040

E-file return.


Contact Names and Phone Numbers

State e-file Coordinator……………………………………………… (601) 923-7055

Fax…………………………………………………………………….. (601) 923-7039

E-Mail………………………………………………………… efile@dor.ms.gov


Mississippi e-file Help Desk………………………………………… (601) 923-7055
Mississippi Department of Revenue Web Site…………….. www.dor.ms.gov

Tax Assistance for Taxpayers

The Mississippi Department of Revenue provides automatic refund information to taxpayers with a refund information telephone line and on-line at DOR’s web site. The Refund Information Line (touch tone phones) and the web site are available 24 hours a day. Taxpayers should be advised to confirm acknowledgement of their e-file return with their practitioner or transmitter before calling to check on the status of his/her refund.


REFUND INFORMATION

  • Contact (601) 923-7801

  • www.dor.ms.gov (Click on the link for refund information)

For automated refund information taxpayers must know:



  • Primary Taxpayer’s Social Security Number

  • The Mississippi Adjusted Gross Income for current year and prior year.

Taxpayers should allow Four (4) weeks for processing of an e-file return before contacting DOR to inquire about the status of a refund.


TAX INFORMATION AND PROBLEMS WITH E-FILE RETURNS

Contact (601) 923-7055



For assistance with e-file returns, other than refund inquires, tax problems, or other questions, Transmitters or ERO should call this number and identify themselves as an electronic filer.

How the Federal/State e-file Program Works
The Mississippi Department of Revenue will allow tax preparers and transmitters already accepted in the Federal e-file Program to participate in the State e-file Program. This program allows for filing of the federal return and state return at the same time. Both returns are transmitted to the IRS. Software used to transmit the data must be approved by the IRS and the DOR. The Internal Revenue Service, after acknowledging to the transmitter acceptance of the federal return with state data, will make the state data available for retrieval by the Mississippi Department of Revenue. After the state data has been retrieved, the DOR will then process the information received.
The Mississippi Department of Revenue will acknowledge to the transmitter receipt of all returns and payments retrieved from the Internal Revenue Service. Transmitters should be able to retrieve the Mississippi acknowledgement within 24 hours from the time acknowledgements are received from the Internal Revenue Service.
How the Unlinked / State Only E-file Program Works

(1041 E-file Only Program)
The Mississippi Department of Revenue will accept state returns filed separate from the Federal return form the 1041 E-file Program Only. The procedures for filing unlinked / State Only returns will be the same as the Federal/State program.
The Mississippi Department of Revenue will allow tax EROs and transmitters already accepted in the Federal e-file Program to participate in the Unlinked / State Only E-file Program. The Unlinked / State Only Program will allow the state return to be e-filed separate from the Federal return. The Unlinked / State Only return, along with a dummy Federal 1041, will be transmitted to the IRS. Software used to transmit the data must be approved by the Internal Revenue Service and the Mississippi Department of Revenue. The Internal Revenue Service, after acknowledging receipt (not acceptance) of the Unlinked / State Only return to the transmitter, will make the Unlinked / State Only return available for retrieval by the Mississippi Department of Revenue. After the Unlinked / State Only return has been retrieved, the Mississippi Department of Revenue will then process the information received.
The Mississippi Department of Revenue will acknowledge to the transmitter receipt of all unlinked/state only returns and payments retrieved from the Internal Revenue Service. Transmitters should be able to retrieve the Mississippi acknowledgement within 24 hours from the time acknowledgements are received from the Internal Revenue Service.


  • Please remember for both the Federal/State and Unlinked / State Only filing programs, acknowledgement from the Internal Revenue Service IS NOT an acknowledgement that the return has been received by the Mississippi Department of Revenue.

Who May Participate

Federal/State and Unlinked / State Only e-file for Mississippi returns are available to all interested parties who have been accepted in the Federal e-file Program and transmit returns to the Internal Revenue Service. The application process for the Federal/State and Unlinked / State Only e-file Programs are outlined below in the Application and Acceptance Section.


The Application and Acceptance Process
Application Process

In order to participate in the Federal/State and Unlinked / State Only e-file Programs, participants must apply to the Internal Revenue Service by submitting Form 8633, Application to Participate in the e-file Program. The deadline for a new 8633 is December 1 of each year, however, revisions to any 8633 may be sent in year round.


Mississippi does not require that the 8633 be submitted to the Mississippi Department of Revenue, but all Software Developers and Transmitters are required to complete and sign the new Electronic Filing Operating Agreement for the 1040 E-file Program. This Agreement form must be completed prior to receiving access to the Schemas and other testing information. It will be made available on our website at www.dor.ms.gov.

For the 1041 E-file Program you will be required to complete the Software Company Information Form. This form is also available on our website at www.dor.ms.gov.
Approval to participate in the Federal/State Mef program includes approval to participate in the Unlinked / State Only Program. Approved EROs’ are not required to submit a new 8633 to participate in the Unlinked / State Only program. Acceptance into the federal program allows an ERO, Transmitter, or Preparer automatic acceptance into the Mississippi program. However, the Mississippi Department of Revenue will conduct suitability checks on all applicants for the Federal/State and Unlinked / State Only Mef Programs and will notify any applicant who is ineligible to participate.
Federal Publication 4164, Modernized E-file Guide for Software Developers and Transmitters. The Internal Revenue Service’s definition of the various categories of electronic filers (Electronic Return Originator, Transmitter, or Software Developer) will apply for Mississippi Mef purposes under the Federal/State and Unlinked / State Only Programs.

The EFIN and ETIN are assigned by the Internal Revenue Service. The DOR will use the same EFIN and ETIN as the IRS in the Federal/State and Linked / State Only Mef Programs.


These numbers will be used in the acknowledgement system to identify preparers and transmitters.


Mississippi Testing

All participants are required to follow the Internal Revenue Service testing procedures for acceptance into the e-file program.


All software developers are required to test their software with Mississippi test data. Only software tested and accepted by DOR may be used for Mississippi electronic filing.
Neither transmitter nor preparers are required to submit test data or transmissions, but they should insure that their respective software has been approved by both the IRS and DOR.
The state test data will be retrieved from the Internal Revenue Service and processed by the Mississippi Department of Revenue. All known software developers will be provided with test materials and instructions to perform the Mississippi testing. Mississippi testing information is available on our website at www.dor.ms.gov under the Software Developer link.

After the tests are submitted to DOR the software developer must contact the e-file coordinator by email with the company name, product name, ETIN, EFIN, and submission identification number for each test transmitted. Please allow up to 72 hour for a reply comparison after the tests are made available to the DOR (24 hours after the IRS acknowledge receipt).

The Mississippi testing period is from November 2014 through January 2015.
All rejections must be corrected before a reply comparison will be done.


Publications
The following publications describe the process of the Federal/State and Unlinked / State Only E-File Programs:
INTERNAL REVENUE SERVICE PUBLICATONS
Publication 1436, Test Package for MeF of Individual and Fiduciary Income Tax Return
Publication 3112, The IRS e-file Application Package
Publication 4164, Modernized E-File Guide for Software Developers and Transmitters
MISSISSIPPI DEPARTMENT OF REVENUE PUBLICATIONS
Mississippi Modernized E-File Handbook
Mississippi Modernized E-File Schemas and Business Rules
Mississippi Modernized E-File Test Package for Individual and Fiduciary Income Tax

The Filing Process
What Can Be Transmitted Electronically
The Mississippi portion of an electronic return will consist of data transmitted electronically and supporting paper documents. In total, an electronic return contains the same information as a comparable return filed entirely on paper documents.
The following forms and schedules may be transmitted electronically:


  • MS 80-105 Mississippi Resident Form (Original or Amended)

  • MS 80-205 Mississippi Non-Resident or Part-Year Resident Form (Original or Amended)

  • MS 80-107 Mississippi Income / Withholding Tax Schedule

  • MS 80-108 Schedules A, Part 1 (Itemized Deductions), Schedule B, Part 2 (Interest and Dividend Income), Part 3 (Voluntary Contributions Check-Offs), Part 4 (Income from Rents, Royalties, Partnerships, S Corporations, Trusts and Estates), Part 5 (Other Income (Loss) and Supplemental Income).

  • MS 80-155 Mississippi Net Operating Loss Schedule

  • MS 80-401 Mississippi Income Tax Credit Summary Schedule

  • MS 80-315 Reforestation Tax Credit-Cost Worksheet

  • 2 Prior Years Resident and Nonresident Returns, if supported by software.

  • MS 81-110 Mississippi Fiduciary Income Tax Return (Original or Amended)

  • MS 81-131 Mississippi Fiduciary Schedule K

  • MS 81-132 Mississippi Fiduciary Schedule K-1


Note: Supporting Federal Return and Schedules are required for all returns that are filed using the MeF program.
Unlinked / State Only returns will be filed with a dummy Federal 1041. All applicable federal schedules must be e-filed with the Unlinked / State Only return also.

What Cannot be Transmitted Electronically
In addition to the returns listed in Publication 1345 as excluded from Federal

E-file, the following documents and forms will not be acceptable for electronic filing on the Mississippi return.
The following forms/line items are not accepted for Mississippi e-file:



  • Non-calendar year returns.

  • A form W-2 with the state employer ID# missing (Please use the Federal employer ID# if the state ID# is missing.)

  • Unlinked/State Only 1040 Returns


Form MS 8453
The ERO must retain the Mississippi Form MS 8453 and copies of the W-2s, Form 1099s, and Form 80-315 Reforestation Tax Credit (if applicable) showing taxable Mississippi income for a period of three years from the due date of the return or the date the return was filed, whichever is later. If a credit for income taxes paid to another state is claimed, the ERO must also retain a copy of the other state’s return for the three year period.

All sections of the MS 8453 must be completed and all the required schedules and attachments must be attached before any return can be transmitted to the Department of Revenue.


Note: The signature document is the same for both the Federal/State and Unlinked / State Only e-file programs.
Part I-Tax Return Information

Enter necessary information from Mississippi Form 80-105 or 80-205. Use whole dollar amounts. Make certain that the information entered on Form MS 8453 corresponds with the information transmitted in the electronic return. Please note that the Mississippi 8453 differs from the Federal 8453 in the Part I Section. The MS 8453 begins with the taxable income, not total income.


Part II-Direct Deposit and Direct Debit

To request direct deposit or a Direct Debit of the taxpayer’s refund or balance due, the following information must be entered correctly:



  • A valid routing number must be entered.

  • The account number must be entered; it may contain up to seventeen (17) characters.

  • Mark either the checking or savings account indicator (only one).


Note: Direct deposit and Direct Debit are available for Unlinked / State Only returns.
Part III-Declaration of Taxpayer

After the return has been prepared and before the return is transmitted, the taxpayer (and spouse, if joint) must verify the information on the MS 8453 and sign and date the document. The preparer/transmitter must provide the taxpayer with a copy of the document. Preparers and EROs are prohibited from allowing taxpayers to sign a blank MS 8453.


Part IV-Declaration and Signature of ERO and Paid Preparer

EROs and Paid Preparers are required to complete all information requested in Part IV of the MS 8453.



Attachments to the MS 8453


  • State copies of forms W-2 and 1099-R with state withholding (attach to back of MS 8453.)

  • Copies of other state’s return if claiming credit for income tax paid to another state.

  • Supporting documents and schedules requiring signatures, if applicable (as described in Internal Revenue Service Publication 1345). Neither the federal nor state returns need to be attached to the back of the MS 8453.

  • Form 80-315 Reforestation Tax Credit.


Note: ERO is required to maintain the MS 8453 for a period of three (3) years. DO NOT mail this document to the Department of Revenue.
Procedures for Retaining the MS 8453

The ERO shall maintain the MS 8453 for a period of three years from the due date of the return or the date the return was filed, whichever is later. If for any reason the ERO ceases his/her business, all MS 8453’s currently being maintained by the ERO should be forwarded to the Department of Revenue. Please contact the Department of Revenue at the following number to receive instructions.


(601) 923-7055- E-file Help Desk
There may be certain occasions that arise in which the Department of Revenue requests the ERO to forward the MS 8453 signature document. If such a need arises, the Department of Revenue will provide the ERO with a written request for the document. EROs must comply with the request within five (5) business days from the date of the request. All requested documents should be sent to the address below.

Department of Revenue

E-file Coordinator

P. O. Box 1033

Jackson, MS. 39215
If the ERO cannot produce the original MS 8453 with all attachments, credit for the tax withheld may be disallowed.
Corrections to Form MS 8453
If the ERO makes changes to the electronic return after the taxpayer has signed the MS 8453 but before the data has been transmitted, the ERO must have the taxpayer complete a corrected MS 8453, if the following conditions apply:


  • Mississippi taxable income changes by more than $25.

  • Mississippi refund or balance due changes by more than $7.

Non-substantive changes are permissible on the MS 8453, provided the person making the correction initials the changes.


The Transmission Process
Transmitting Federal/State Returns:

If the Mississippi electronic return is being transmitted with the federal return, the transmitter must follow all electronic transmitting procedures, communication requirements, and technical specifications required by the Internal Revenue Service, as defined in Publication 1345.


Participants in the Federal/State e-file Program must confirm with their software developer or direct transmitter that the software has the capability of processing and transmitting the state data along with the federal data.
Transmitting Unlinked / State Only Returns:

Unlinked / State Only returns will be transmitted with a dummy Federal 1041 return attached to the state return. Preparers must still follow all electronic transmitting procedures, communication requirements, and technical specifications required by the Internal Revenue Service, as defined in Publication 1345.


Note: A copy of the Federal return and all applicable federal schedules (Schedule C, F, E, 2106, etc.) must be included as a XML document in the electronic transmission for Unlinked / State Only filing.

Participants in the Federal/State and Unlinked / State Only e-file programs must confirm with their software developer or direct transmitter that the software has the capability of processing state returns.



Rejected Returns
For Federal/State Returns

If a federal return is rejected due to errors, the accompanying state return will also be rejected. For a list of rejections and Alerts, please refer to this Handbook. If the error is one that can be corrected and the record processed, both return records may be retransmitted to the Internal Revenue Service. If a state return cannot be corrected, the filer has the option of retransmitting the federal return data and filing a paper state return.






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