The error message also says "These rules are set by the Internal Revenue Service Electronic Tax Administration", so I doubt that it is an error.

This isn't something new.  I've run into it in previous years where if you had taxpayer that qualifies for the EITC with no kids whose only income is self employment income.  If you qualify for the EITC and have kids and only self employment income it is not an issue.  It's when you don't have kids that the error is triggered.  I think it's a way to screen for fraudulent EITC claims by requiring those returns to be manually filed instead of letting them zip through the e-file system.

But then again, that wasn't the point of my original post.  I only put that in to answer the inevitable question of why I wasn't e-filing the Federal return. 

My main issue was the Form 4868 supposedly being "in processing" and not allowing me to e-file the state returns while manually filing the Federal return.