This software was originally created for use with federal returns. The process, although extremely complex for the IRS and software providers to implement, is actually quite simple for users. After a tax payer completes their federal return with the computerized software, they pay a small fee and the provider immediately transmits the tax return to the IRS for verification. The provider then keeps the tax payer up to date on the status of their return, from IRS acceptance to the expected deposit date of a refund.



Many states now support eFiling state tax forms. Rather than requiring a separate, paper form be mailed, these states extend the benefits of computerized filing. eFile providers offers services nearly all states that support this method of filing, and often offer special rates when tax payers process both their federal and state returns through their service.

The method a taxpayer must use to eFile their return will depend upon the state they reside in. There are two different types of state eFiling systems: Independent and Joint Electronic Filing or JELF.

Independent states use an eFiling system that is completely separate from that of the Internal Revenue Service. To use this service, a tax payer must provide their Declaration Control Number, or DCN, which can be retrieved from the specific state's IRS. Independent states do not require the tax payer to have filed a federal tax return. Currently, California, Illinois, Maine, Massachusetts and Minnesota are the only states that maintain an Independent system.

The second type, JELF, requires the tax payer to have filed their federal return before completing their state tax forms. Nearly all other states use the JELF system. While most states require only that the federal return is filed first, Arkansas requires that the state return is filed at the exact same time as the federal return. Both documents must be completed, and then transmitted together, to be considered valid for state eFiling.

Do note that two states offer no support for eFiling: New Hampshire and Tennessee. While taxpayers in these states can still file their federal tax return electronically, they must use a paper return when completing their state income taxes. Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming have no state income tax system, so state eFiling is not needed for taxpayers residing and working in those states.

Since nearly all taxpayers can take advantage of eFiling for both their federal and state returns, authorized electronic filing providers have begun to expand their support for state tax forms.