Latest version of financial data sharing API brings all 2020 tax year forms and statements under single standard for seamless digital delivery.
RESTON, Va., Nov. 10, 2020 /PRNewswire/ — The Financial Data Exchange has released Version 4.2 of the FDX API which now includes the most comprehensive tax information fields of any API in the United States.
In addition to continuing to provide the financial industry with a common, interoperable and royalty-free standard for all user-permissioned financial data sharing, the FDX API now encompasses 51 different IRS forms and statements. The FDX API paves the way for transition from current disparate tax formats, Open Financial Exchange (OFX) and Tax Exchange Format (TXF), as well as other often used proprietary formats like PDF and CSV. These changes to the FDX API make tax preparation and reporting more efficient and secure than ever before. Other updates contained in FDX API 4.2 include the separation of the banking and tax specification for easier readability and the addition of annuity accounts to the API.
“FDX API 4.2 represents another high-water mark for our organization and continues to deliver on FDX’s promise to give the financial industry a secure, best-in-class open standard for all different types of user-permissioned data sharing,” stated FDX Managing Director Don Cardinal.
The announcement of FDX API 4.2 puts in place a single standard data structure for exporting and importing almost all tax accounting data in the U.S that does not require the sharing of login credentials. Before the advent of FDX 4.2, tax information has been split between a patchwork of different standards like OFX, TXF, PDF, and CSV. FDX API 4.2 will enable a secure data sharing standard for interactions between tax software applications and companies that operate tax form data servers, such as payroll companies, banks, and brokerage firms. Further, all FDX data structures are readily generated and consumed using the ubiquitous JSON data serialization technology.
“The FDX Tax Task Force’s work on the FDX API 4.2 specification will provide a huge upgrade in security for tax information reporting data,” said Clyde Cutting, Systems Architect at Wells Fargo, and member of the FDX Tax Task Force that worked to deliver the updated standard.
In addition to the FDX API standard’s existing support for an array of tax forms and statements, the new version of the FDX API now fully supports all types of business, royalty, farm, and rental income tax information.
FDX 4.2 will also provide U.S. tax reporting data in a human-readable text format for the first time so that it can be used for file importing and exporting with tax return preparation software. In addition, this same format allows QR codes to be added to annual tax documents so that smart phone apps using open QR code technology can be used by all tax filers.
“The release of version 4.2 of the FDX API specification, and the unification of all annual tax form and statement data under one standard, will allow the tax software industry to simplify and streamline the income tax return preparation process for taxpayers and accountants alike,” said Bruce Wilcox, President of Internet Tax Information Processing Services (iTips), and member of the FDX Tax Task Force.
FDX recommends that the tax software industry begin replacing support for the older TXF data files with data files using the FDX API 4.2. To facilitate implementation of the new FDX API 4.2 standard for tax information, developers and implementers can visit this technical page for further information about the standard and assistance with migration from TXF and OFX to FDX data structure. Tax Data Exchange is an independent production of members of FDX’s API & Data Structures working group who specialize in tax data exchange.
About Financial Data Exchange
Financial Data Exchange, LLC (FDX) is an international, nonprofit organization operating in the US and Canada that is dedicated to unifying the financial industry around a common, interoperable, royalty-free standard for the secure access of permissioned consumer and business financial data, aptly named the FDX Application Programming Interface (FDX API). FDX members include financial data providers (i.e. financial institutions), data recipients (i.e. third-party financial technology companies or fintechs), data access platforms (i.e. data aggregators and ecosystem utilities), consumer groups, financial industry groups and other permissioned parties in the user-permissioned financial data ecosystem. FDX is an independent subsidiary of the Financial Services Information Sharing and Analysis Center (FS-ISAC). For more information and to join, please visit financialdataexchange.org.