On Thursday, April 14, President Obama signed into law legislation that repeals new 1099 reporting requirements. The 1099 legislation, which was originally passed as part the Patient Protection and Affordable Care Act (PPACA), required certain entities to file a Form 1099 with the Internal Revenue Service (IRS) for purchases of $600 or more of goods and services.
ACA advocated against this legislation collaboratively with ASAE, The Center for Association Leadership and the U.S. Chamber of Commerce because it would be overly burdensome to associations and businesses of all sizes. This opposition began shortly after the passage of the PPACA when it became apparent that businesses would have been forced to issue hundreds or even thousands of forms each year, track cumulative payments to vendors, and obtain tax identification information from each vendor.
H.R. 4, The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, passed the House in early March and was approved by the Senate on April 5 with strong support in an 87-12 vote.
The cost of the repeal has been estimated to be as much as $22 billion. The bill subsidizes these expenses by requiring people making 400 percent of the federal poverty limit to repay health insurance exchange subsidies if their income increases over the course of a year.
ACA is very pleased that their collaborative efforts were effective in protecting the thousands of ACA members who are small business owners or that may have been otherwise burdened by the burdensome 1099 requirements.