Combined Federal/State Code Error for IRS File

I received an email from the IRS that says that I have errors in my IRS file, and that the file was Bad. The error references Combined Federal/State code...how do I fix this?

The error message you received from the IRS probably looks similar to this:

This error means that you have state codes set up with an IRS code in the IRS State Code Setup:

If your organization does not participate in the Combined Filer program, your State codes should all read 00. To correct, click each state where there is a number (other than 00) and change the IRS code to 00:

Once you have modified all the state codes, you can go back to the IRS Reporting System and re-generate the file for the IRS.