Obama Expected to Sign 1099 Repeal Bill


On April 5, the Senate approved a bill (H.R. 4) to repeal the controversial information reporting requirements on Form 1099 that were to take place after December 31, 2011. President Obama is expected to sign the bill when it reaches his desk. See more...

Some history.....The passage of the Patient Protection and Affordable Care Act in March 2010 included an expansion of business information reporting.  It requires businesses, charities and government entities to file a Form 1099 when they make annual purchases of $600 or more to a single provider of goods, other than to a vendor that is a tax exempt organization, for payments made after December 31, 2011.  The Act also included a section calling for the repeal of the reporting exception for payments made to corporations.

The repeal is great news for small business owners, who could have been faced with heavy bookkeeping burdens had this portion of the act stayed in effect.  The repeal means that the rules for business payments continue unchanged.  Small Businesses must continue to issue Form 1099 for payments of $600 or more to service providers.  The exception for payments made to corporations would also remain unchanged.  The exception does not apply to payments made for attorney's fees and amounts paid to a corporation that provides medical or health care services. 

If you are a small business owner and have questions regarding your information return filing requirements, please feel free to contact my office.