May 6, 2011

1099 Tax Reporting Requirement Repealed

A requirement in the Patient Protection and Affordable Care that expanded 1099 reporting rules for businesses was repealed. The requirements would have forced businesses to report to the Internal Revenue Service payments for goods and services of more than $600, beginning in 2012. The new law repeals these requirements.

The provision was intended to raise nearly $17 billion to help pay for healthcare reform. Businesses and nonprofits argued that complying with the law would cost much more and could serve to increase tax noncompliance.

To recoup the lost revenue, payment requirements for individuals receiving subsidies to buy coverage through the exchange in 2014 have changed. Those who purchase coverage through the exchange will have to repay larger part of the subsidy if their household income increases.

For more information visit IRS.gov.