Taxpayers Get Double-Duty from E-Filing

WASHINGTON - More than 6 million taxpayers have found that if filing one tax return electronically is good, e-filing two is better -- especially when they can send both together. According to the Internal Revenue Service, such federal/state e-filings have increased by 33.5 percent over this time last year.

Thirty-six states allow taxpayers to e-file their federal and state returns in one transmission, either through tax professionals or from their home computers. The IRS receives the data and sends the state information on to the state tax agencies for their processing.

"This partnership with the states gives taxpayers the same benefits for their state tax returns -- greater accuracy, faster refunds and an acknowledgment of filing -- that they enjoy for their federal returns," said Bob Barr, IRS Assistant Commissioner for Electronic Tax Administration. "Taxpayers are responding strongly and positively to the electronic tax options the IRS and the state tax agencies are offering."

Seven states -- including four federal/state participants -- have independent computer-filing programs, in which they receive the state tax data directly. More than 2 million taxpayers have filed their state returns through such programs this year.

Twenty-four states also offer telephone filing for state returns. Two of them -- Indiana and Kentucky -- are testing a federal/state TeleFile with the IRS. Nearly 1.8 million taxpayers have filed their state returns by phone this year.

Taking these various state options together, about 9.9 million taxpayers have e-filed their state returns so far this year, nearly two-thirds of the 15.6 million taxpayers in the same states who have e-filed their federal returns.

Nationwide, the IRS had received 20.2 million e-filed returns as of Mar. 5, up 14.3 percent from last year. The IRS has processed more than $52.3 billion in refunds, compared to $45.1 billion at this time last year. The average tax refund -- $1677 -- is up 15.6 percent.

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