Per the New York Tax return preparer e-file mandate web page (Important notes about the mandate, note 4):

If you can't electronically file the return because it's not supported by your approved e-file software or it can't be filed on our website, then you aren't required to e-file it.

Additional information for preparers is available on the New York State website:

• More tax preparer e-file mandate information
• E-file mandate penalties for tax preparers

Penalties for both Preparers and Individuals are outlined on the New York Electronic filing mandate for business taxpayers website.

Penalty amounts for tax preparers

If you:

• fail to e-file one or more tax documents, you are subject to a $50 penalty per document, unless you can document reasonable cause for not e-filing.
• charge a separate fee to e-file, you are subject to a $500 penalty the first time you charge and a $1,000 penalty for each subsequent charge.

Penalty amounts for business clients

• fail to e-file one or more tax documents, they are subject to a $50 penalty per document.
  
• fail to electronically pay any taxes, fees, or other amounts they owe to the department, they are subject to a $50 penalty per payment.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.