If you are located in California and file paper information returns with the IRS, you are not required to file a paper copy with the FTB. The IRS will forward the information to the FTB. This means that your clients do not have a "paper" filing requirement with the FTB even if they have to file 250 or more information returns. However, California conforms to federal regulations regarding magnetic media filing of Forms 1098, 1099, 5498 and W-2G information returns. Information return volumes that meet the prescribed threshold must be filed on magnetic media. The volume of threshold of 250 or more applies to all forms reportable to California: 1098, 1099-A, 1099-B, 1099-C, 1099-DIV, 1099-G, 1099-INT, 1099-MISC, 1099-LTC, 1099-OID, 1099-PATR, 1099-R, 1099-S, 5498 or W-2G.
The 250-or-more return threshold applies to each return type; i.e., it is not an aggregate amount. For example, a payer who has 249 interest (1099-INT) and 249 dividend (1099-DIV) returns to file would not have a mandatory California magnetic media filing requirement. However, California encourages payers with fewer than 250 returns of one type to file magnetically.
In most cases, California's dollar threshold parallels those of the IRS; i.e.; 1099-INT: $10 or more, 1099-B: all amounts, etc. Our rules allow payers to file all California returns in accordance with the limits prescribed by the IRS. Payers may file California returns that are under the prescribed dollar limits.
Presently, Forms 1099-MSA, 5498-MSA, 1098-T and 1098-E are not required by California returns. However, since some payers prefer to file all copies of their federal returns with their California returns, California allows it to be mixed with other return types; e.g., 1099-MSA and 1099-MISC. Media files that contain only Forms 1099-MSA, 5498-MSA, 1098-T or 1098-E returns must not be submitted to California.