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On April 14th, President Obama signed H.R. 4, also known as the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, a bill repealing the controversial and unpopular 1099 tax reporting requirement mandated by last year’s health care legislation. It is the first provision of the health care reform law to be repealed.
Without the repeal, the tax compliance provision would have required businesses and nonprofits to report on Form 1099-MISC payments to contractors and vendors that total $600 or more annually, starting in 2012. The repeal of this legislation removes the burden of additional paperwork for small business owners and payroll administrators. The IRS hoped to use the new law to track down unreported income. However, the business community at-large doubted that any additional revenue received would even come close to matching the heavy burdens placed on businesses and the IRS.
“Small business owners are the engine of our economy and because Democrats and Republicans worked together, we can ensure they spend their time and resources creating jobs and growing their business, not filling out more paperwork, ” the President said upon signing the repeal.
