Congress Repeals 1099 Requirement
WASHINGTON, DC—In a victory for millions of small businesses across the country, Congress voted this week to repeal the unpopular aspect of President Obama’s health care legislation that would have forced businesses to file Form 1099 tax forms for every vendor that sold them in excess of $600 in goods. Though not related to the health care, the Form 1099 law—slated to take effect in 2012—would have helped pay for part of it.
The Senate voted to repeal the filing requirement by an 87-12 vote, which followed a House vote in early March. President Obama is expected to add his signature to the repeal.
Currently, businesses are only required to send a Form 1099 to individuals who provide rent, interest, dividends, and non-employee services in excess of $600 to a business. Payments to a corporation and payments for merchandise do not need to be reported.
The provision had been expected to raise nearly $25 billion during a 10-year stretch by ensuring that vendors pay their taxes. The money will be made up by changing another part of the health care bill, requiring more families to repay tax credits designed to help them cover insurance premiums.