President Barack Obama signed into law, on April 14, a bill repealing expanded Internal Revenue Service Form 1099 reporting requirements.
The law repeals Section 9006 of the Patient Protection and Affordable Care Act of 2010 that would have required businesses to fill out 1099 forms for both goods and services valued at more than $600 starting in 2012. With the bill signed into law, businesses will now continue to have to fill out 1099 forms only for services of $600 or more in 2011 and beyond.
President Obama declared in his signing statement, “Small business owners are the engine of our economy and because Democrats and Republicans worked together, we can ensure they spend their time and resources creating jobs and growing their business, not filling out more paperwork.”
The “Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011” was introduced in the House of Representatives on Jan. 11. It passed the House on a vote of 314 to 112 on March 3, and passed the Senate on April 5 on a vote of 87 to 12.
Republicans and Democrats have disagreed on how to replace the nearly $22 billion in lost revenues that the Congressional Budget Office estimated would be generated by the expanded 1099 reporting requirements that would capture lost taxes on income that currently goes unreported.
The Senate voted 81 to 17 on Feb. 2 to repeal the expanded reporting requirements and offset it with spending cuts. The House version that President Obama signed into law eliminated some health-insurance tax credits passed last year in the health care reform. ■