1099 Requirement in Health Care Law Repealed

By Harry Sit

Small businesses can breathe a sigh of relief. The dreaded 1099 filing requirement added in last year’s health care law is repealed before it has a chance to take effect.

Under the health care law, a business is required to issue a 1099 form to all vendors starting in 2012 if the business purchases $600 or more in goods or services in a year from that vendor. It’s especially burdensome for small businesses to collect information from corporate vendors such as chain stores or even gas stations.

It took a new law to repeal this provision in the health care law. The new law has a tongue-twisting name: Comprehensive 1099 Taxpayer Protection and Replacement of Exchange Subsidy Overpayments Act of 2011. It passed both houses with overwhelming support, 314-112 in the House, 87-12 in the Senate. President Obama is expected to sign it. For once, politicians do agree on something.

After the repeal, it’s back to business as usual. In general, a 1099 is required only if the vendor is a person, not a corporation, AND only if the purchase is for services, not goods.

The new law also repealed a similar 1099 reporting requirement for landlords enacted in last year’s Small Business Jobs Act.

Reference: 1099 Taxpayer Protection Act of 2011, CCH Tax Briefing

2.2% Rewards Card $444 Bonus

Earn 2.2% toward travel on all purchases with Barclaycard Arrival World MasterCard. No caps and no foreign transaction fees. 40,000 bonus points if you make $1,000 or more in purchases in the first 90 days. $89 annual fee waived in the first year (40,000 bonus miles pay for 5 more years after that). Learn More

Software picked, likely related posts:

Posted on April 6, 2011 under Taxes.

Leave a comment

Comments

Tell me what you're thinking, but please don't spam. See comments moderation policy.