What is the Combined Federal/State Filing (CF/SF) Program?
The Combined Federal/State Filing (CF/SF) Program is an initiative by the IRS and state tax agencies to simplify tax reporting for businesses and taxpayers. It allows businesses to electronically file certain information returns (e.g., 1099 forms) with the IRS, which then forwards the data to participating state tax departments.
This program eliminates the need for businesses to file duplicate forms with both the IRS and state tax agencies, reducing administrative burdens and improving compliance.
How Does the CF/SF Program Work?
- Step 1: Businesses file eligible information returns (e.g., Forms 1099-MISC, 1099-INT) electronically with the IRS.
- Step 2: The IRS processes the forms and automatically forwards them to participating state tax authorities.
- Step 3: The states receive the data and use it for tax compliance and reporting.
- Step 4: Businesses only need to file once, reducing paperwork and potential errors.
Benefit: If a business operates in multiple states, it saves time by avoiding separate state filings.
Which Forms Are Eligible for CF/SF Filing?
The IRS currently allows the following 1099-series forms to be filed under the CF/SF program:
- Form 1099-MISC – Miscellaneous Income
- Form 1099-INT – Interest Income
- Form 1099-DIV – Dividends and Distributions
- Form 1099-B – Proceeds from Broker Transactions
- Form 1099-G – Certain Government Payments
- Form 1099-K – Payment Card and Third Party Network Transactions
- Form 1099-OID – Original Issue Discount
- Form 1099-PATR – Taxable Distributions from Cooperatives
Note: Some states may require additional filings or forms that are not included in the CF/SF program. Always check state-specific rules.
Which States Participate in the CF/SF Program?
Not all U.S. states participate in the CF/SF program. The IRS updates the list of participating states annually. Here are the states that typically participate:
- Alabama
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Georgia
- Hawaii
- Idaho
- Indiana
- Kansas
- Louisiana
- Maryland
- Massachusetts
- Minnesota
- Missouri
- Montana
- Nebraska
- New Jersey
- New Mexico
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- South Carolina
- Wisconsin
Important: States like Florida, Nevada, Texas, Washington, and Wyoming do not have a state income tax and do not require 1099 filings.
Check the IRS website or state tax department for updates, as participation may change yearly.
How to File Using the CF/SF Program?
Follow these steps to file 1099 forms through the CF/SF program:
Prepare the Required 1099 Forms
Ensure your 1099 forms are accurate and include TINs (Taxpayer Identification Numbers), payment amounts, and payer information.
Use the IRS FIRE System for Electronic Filing
- The Filing Information Returns Electronically (FIRE) System is used to submit 1099s.
- Businesses must have a Transmitter Control Code (TCC) from the IRS to file electronically.
Ensure You Meet the IRS Filing Deadline
- E-file Deadline for 1099 Forms: Typically March 31 each year.
- If filing paper forms, the deadline is usually February 28.
IRS Processes & Forwards Forms to Participating States
Once submitted, the IRS shares the 1099 data with the participating states. Businesses do not need to submit a separate state filing for those states.
Verify State-Specific Requirements
- Some states require additional reports or withholdings even if they participate in CF/SF.
- Check your state’s tax website for any extra filing steps.
Benefits of Using the CF/SF Program
1. Reduces Administrative Work
Filing once with the IRS eliminates the need to file separately with each participating state.
2. Saves Time & Costs
Businesses avoid extra paperwork, reducing compliance costs.
3. Improves Compliance & Accuracy
Since the IRS forwards the exact data to states, errors are minimized, ensuring consistency.
4. Easier Multi-State Reporting
For businesses operating in multiple states, this program simplifies tax reporting.
5. Secure & Efficient
Electronic filing via the IRS FIRE system ensures faster processing and secure data transfer.
Limitations & Considerations
1. Not All States Participate
If a business operates in a non-participating state, separate state filing may still be required.
2. Requires IRS E-Filing Registration
Businesses must register for the IRS FIRE System and obtain a Transmitter Control Code (TCC).
3. Some States Require Additional Filings
Certain states still require direct reporting of other tax-related forms, such as state withholding reports.
Frequently Asked Questions (FAQs)
Q1. Do I Still Need to File 1099s Separately for Non-Participating States?
Yes. If a state does not participate in CF/SF, you must file directly with that state’s tax agency.
Q2. Is There a Fee to Use the CF/SF Program?
No, the CF/SF Program is free for businesses using the IRS FIRE System.
Q3. Can I File Paper Forms Instead of E-Filing?
No. The CF/SF program is only available for electronically filed 1099 forms.
Q4. What Happens If I File Late?
Late filings may result in IRS penalties and state-level fines.
Final Thoughts
The Combined Federal/State Filing (CF/SF) Program is a great tool for businesses to streamline tax reporting, reduce workload, and ensure compliance. By electronically filing eligible 1099 forms with the IRS, businesses can avoid duplicate state filings in participating states.
Make tax reporting easier! Check if your state participates and start e-filing today.
