State Filing

In addition to federal IRS filing, many states require 1099 information returns to be filed with the state tax agency. These requirements vary by state, form type, payment amount, withholding amount, and whether the state participates in the IRS Combined Federal/State Filing program.

TaxBandits simplifies this process by supporting both federal and state filing through the API. When state filing is enabled, TaxBandits determines the applicable filing method and submits the state copy automatically.

How state filing works

When you enable state filing, TaxBandits evaluates the form type, recipient state, and filing data to determine how the state copy should be handled.

State filing may be required when:

Requirement type	What it means
State tax was withheld	Some states require filing when state income tax was withheld, even if the payment amount is below the federal reporting threshold.
Federal threshold is met	Some states follow the federal reporting threshold for the applicable 1099 form type.
State-specific threshold is met	Some states set their own filing thresholds that may differ from federal requirements.

For detailed state-by-state rules, see the 1099 State Filing Requirements guide.

Filing method

When state filing is enabled, TaxBandits determines the applicable filing method based on the state, form type, and filing data. State copies may be routed through the IRS Combined Federal/State Filing program or filed directly with the state agency.

Filing method	How it works	When it applies
Combined Federal/State Filing (CF/SF)	The 1099 return is filed with the IRS, and the IRS forwards the applicable state information to participating state agencies.	Applies when the state participates in the CF/SF program, and the form type is supported for that state.
Direct state e-filing	TaxBandits files the 1099 information directly with the state agency.	Applies when the state does not participate in CF/SF, the form type is not supported through CF/SF, or the state requires direct filing.

State line-item data

State filing requires state-specific values inside the State array for each return record. This array can support multiple states when a recipient has reportable income or withholding across more than one state.

To enable state filing, you must set IsState to TRUE.

Field	Description
StateCd	Two-letter state code for the applicable state.
StateWH	State income tax withheld from the recipient during the year.
StateIdNum	Payer’s state taxpayer identification number issued by the state agency.
StateIncome	Amount of income subject to state reporting.
StateReconData	Provides state-level reconciliation or summary information required by certain states in addition to recipient-level state filing data.

Some states require the payer’s state ID even when no state tax was withheld. If required state values are missing or invalid, the state filing may be rejected even if the federal filing is accepted.

State filing status retrieval

State filing status is processed independently from the federal filing status. This means a return may be accepted federally but rejected by one or more states. Federal and state outcomes should always be reviewed separately.

You can retrieve the state filing status in two ways:

• Status endpoint: Use the Status endpoint to retrieve the latest filing status for both federal and state returns. In the Status endpoint response, the State array includes one entry for each state included in the filing. Each state entry returns its own status details.

• Webhooks: For automated updates, configure the E-file Status Change (State) webhook event in the Developer Console. When a state agency accepts or rejects a return, TaxBandits sends a webhook notification with the updated state filing status. This is recommended for high-volume filings because it reduces the need to repeatedly poll the Status endpoint for state outcomes.

State corrections

A state correction is required when a change needs to be made after the state return has been accepted by the state agency. For example, a state correction may be needed if the filer identifies an incorrect state ID, state income, state withholding amount, or other state-specific information after acceptance.

If both the federal and state information need to be corrected, file a federal correction and set IsState to TRUE. TaxBandits will include the corrected state copy along with the corrected federal return.

If only the state information needs to be corrected, submit a state-only correction with:

• IsFederal set to FALSE
• The corrected States array included in the correction payload

For detailed correction request formats, supported scenarios, and payload examples, refer to the 1099 Corrections section of this API documentation.