Congress Finally Repeals Much Maligned 1099 Reporting Requirements

On April 5, the United States Senate, by an 87-12 margin, passed H.R. 4, repealing the onerous 1099 reporting requirements contained in the Patient Protection and Affordable Care Act (PPACA), as well as the 1099 reporting requirements for rental property expense payments contained in the Small Business Jobs and Credit Act of 2010.

Currently, businesses must file an Internal Revenue Service (IRS) form 1099 for purchases of services from non-corporate entities. The repealed provisions essentially would have required 1099 reporting for all transactions in excess of $600.

The expanded 1099 reporting requirements were originally enacted as revenue raisers. The repeal of these provisions will be paid for by increasing the recapture limit of overpaid healthcare credits paid under PPACA.

This repeal is welcome news for businesses and organizations of all sizes, and for millions of taxpayers owning rental properties. The time and cost that would otherwise have been devoted to complying with the repealed rules can now be devoted to more productive activities.

The bill now moves to the President’s desk for his signature.

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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax-related matter.

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