On Tuesday, April 5, the Senate voted 87 – 12 to fully repeal the expanded 1099 reporting requirement in the Patient Protection and Affordable Care Act. The bill, HR 4, now goes to President Obama for his signature.
On Tuesday, April 5, the Senate voted 87 – 12 to fully repeal the expanded 1099 reporting requirement in the Patient Protection and Affordable Care Act. The bill, HR 4, now goes to President Obama for his signature. The president supports the repeal, as reported by the New York Times.
At present, businesses are required to file 1099 forms for purchases of services of $600 or more each year from unincorporated businesses, such as sole proprietorships, according to Medscape Medical News. The health care bill extended this requirement to cover purchases of property and goods in addition to services from all businesses, including corporations, MMN reported.
In response to the passage of HR 4, the White House said in a statement that it was “pleased Congress has acted to correct a flaw that placed an unnecessary bookkeeping burden on small businesses. Small businesses are the engine of our economy and eliminating the 1099 reporting requirement is the right thing to do. As we move forward, we look forward to improving the tax credit policy in this legislation to ensure we protect small businesses and middle-class families. And the Administration remains eager to work with anyone with ideas about how we can make health care better or more affordable for all Americans.”
According to the Times, it had been expected that the 1099 filing requirement would raise about $25 billion over the next decade by ensuring that vendors paid their taxes. Under the new bill, this money will be offset by requiring low- and middle-income families that receive healthcare tax credits to pay back these subsidies if their income increases, as reported by CFO.com.