Once MeF is fully implemented, the current 1040 e-file program will be phased out over an extended period of time.

MeF will deliver significant value and benefits to tax preparers beyond the capabilities of the current e-file system. Some benefits of filing through MeF are:

• Year-Round Filing - Returns filed through MeF can be submitted year-round.

  Prior-Year Returns - MeF will allow filing of prior-year 1040 returns. As a new tax form type is added to the MeF platform, tax returns will be accepted for the current tax year only. As subsequent tax years are added to the system, MeF will accept the current tax year and two prior tax years.
  
  For example:

  • In January 2010, 1040 MeF will accept tax years 2009.
  • In January 2011, 1040 MeF will accept tax years 2010 and 2009.
  • In January 2012, 1040 MeF will accept tax years 2011, 2010, and 2009.
     
• Binary Attachments - The MeF program allows for certain required documents to be electronically attached to the return. Refer to the Michigan Tax Preparer Handbook for additional information regarding Michigan attachments.
  
  Note: MeF currently only supports Portable Document Format (PDF) attachments.
   
• More Detailed Error Conditions - Error explanations pinpoint the location of the error in the return and provide complete information in the acknowledgement file that is passed back to the transmitter. Under the current 1040 e-file program, one error code may apply to multiple types of e-file error conditions. MeF error codes use simple wording to clarify each error that triggers a rejection. Michigan will return up to 10 error reject codes per return. Refer to the Michigan Tax Preparer Handbook for additional information regarding error reject codes.

Modernized e-File will not change the way tax preparers transmit e-file returns. Tax preparers may not even know the return was transmitted as an MeF return, although a rapid IRS acknowledgement will be the giveaway. In most cases, the returns are sent to a transmitter who then sends the return to the IRS. Tax preparers should discuss MeF with their software provider, especially when it comes to error codes. They should find out specifically what the provider is offering. Tax preparers should learn whether or not their provider will support MeF, how the provider will handle acknowledgements and error codes, and if the software will support PDF attachments.

A state submission can be linked to the IRS submission by including the IRS Submission ID of the federal return in the state manifest. If the state submission is linked to an IRS submission (also referred to as a Fed/State return), the IRS will check to see if there is an accepted IRS submission under that IRS Submission ID. If there is not an accepted federal return for that tax type, the IRS will deny the state submission and a federal acknowledgement will be sent to the transmitter. The state has no knowledge that the state return was denied (rejected) by the IRS. If there is an accepted federal return under that IRS Submission ID, then MeF will perform minimal validation on the state submission. The validation includes verifying that the state is a participating state in the Fed/State Program. The IRS will then pass along to the state the data the ERO/taxpayer sends in the state submission to the identified state.

Note: The IRS recommends if a state submission is linked to an IRS submission, send the IRS submission first and after it has been accepted, send the state submission.