Client Alerts Former Form 1099 Requirements Repealed

Publication
04.28.11

President Barack Obama signed into law the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011. This legislation repeals two recently enacted Form 1099 information reporting requirements deemed burdensome by businesses of all sizes.

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President Barack Obama signed into law the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011. This legislation repeals two recently enacted Form 1099 information reporting requirements deemed burdensome by businesses of all sizes.

Background. In March 2010, the Patient Protection and Affordable Care Act (part of the health care reform legislation) expanded the 1099 reporting requirements, to include all payments from businesses aggregating $600 or more in a calendar year to a single payee, starting with payments made in 2012. Previously certain payments to corporations and payments made for property were exempt from 1099 reporting.

In September 2010, the Small Business Jobs Act required individuals receiving rental income to issue 1099s to service providers for payments of $600 or more, effective for payments made after December 31, 2010.

Expanded 1099 Reporting Repealed. As a result of the repeal of these expanded reporting requirements detailed above, the 1099 reporting rules previous to the health care reform legislation remain in place. In particular, businesses must continue to issue 1099s for payments of $600 or more to service providers. Additionally, the long-standing exemption to information reporting for payments made to corporations remains intact.

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