Businesses large and small have been concerned about the language in the new Federal Healthcare Reform Legislation requiring businesses to file paperwork reporting for each customer making purchases of $600 or more in 2012.
I am pleased to report that there has been a successful effort to repeal the form 1099 reporting requirement. Here is a summary of the effort:
- On April, 5, 2011, the Senate approved the House Bill (H.R.4), which repeals the Form 1099 reporting requirement included within The Patient Protection and Affordable Care Act, PPACA, enacted in March, 2010.
- The Senate majority vote (87 to 12) follows the House majority vote (314 to 112) on March 3, 2011. President Obama is expected to sign the legislation into law, or at a minimum, not veto the legislation, which will passively pass the law within 10 days.
- PPACA expanded the 1099 reporting requirement to include payments greater than $600 for goods and services, effective January 1, 2012.
- H.R. 4 repeals all new Form 1099 provisions, including payments to corporations, payments for property and payments related to rental income earnings.
- Prior to PPACA, payments to corporations were typically exempt (through regulations) and businesses only reported annual payments over $600 for vendor services (not goods).
- Initially, the 1099 reporting requirement expansion was intended to generate revenue to fund PPACA by raising estimated underreported income. Months of varying repeal language has been proposed in both congressional chambers to offset the projected revenue loss of repeal (estimates range from $17- $22 M), prior to the passage of H.R.4.
- H.R. 4 includes offset language mandating that individuals repay federal health insurance premium assistant tax credits as income increases (overpayments that must be included as income in 2014).
- In a White House press statement, while President Obama prefers to improve the offset language included in H.R.4., he is expected to support the bipartisan legislation, and may revisit tax policy modifications within PPACA.
Special thanks to Oswald Companies for providing the content for this article. Oswald Companies (http://www.oswaldcompanies.com/) was founded in 1893 and is among the nation's largest independant, employee owned insurance brokerage firms.