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Congress Repeals 1099 Reporting Requirements Contained in the Health Care Bill

On April 5, the United States Senate passed H.R. 4, repealing the 1099 reporting requirements contained in the Patient Protection and Affordable Care Act (PPACA) that otherwise would have taken effect in 2012. H.R. 4 also repeals the 1099 reporting requirements for rental property expense payments contained in the Small Business Jobs and Credit Act of 2010.

This legislation has already passed in the House and now moves to the President who has indicated he will sign the bill into law.

Currently, businesses must file a 1099 form for purchases of services from non-corporate entities. Enacted with the purpose of raising revenue, the PPACA provisions would have required 1099 reporting for all transactions in excess of $600. Additionally, the Small Business Jobs Act of 2010 generally requires rental property owners who are not engaged in a trade or business to issue 1099 forms. H.R. 4 repeals both the $600 purchasing reporting requirements and the rental income reporting requirements – keeping intact the long-standing tax regulations that made corporations generally exempt from IRS Code 6041.

The passage of H.R. 4 should come as welcome news to business owners, as well as individuals who own rental property, freeing them from the additional cost and effort of compliance.

Update: On April 14, President Obama signed H.R. 4 into law.

If you have any questions regarding H.R. 4, please contact your Blackman Kallick representative or any member of our Tax Team.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.