Wednesday, March 09, 2011
U.S. House Passes 1099 Reform
The U.S. House of Representatives passed H.R. 4, the Small Business Paperwork Mandate Elimination Act, legislation to repeal the burdensome 1099 reporting requirement that was part of the federal health care law.
The bill was passed on March 3, by a vote of 314-112. The Maryland Chamber thanks Reps. Roscoe G. Bartlett (R-Dist. 6), Andy Harris (R-Dist. 1) and Dutch Ruppersberger (D-Dist. 2) for voting for the repeal.
Current law generally requires that a Form 1099 be filed for purchases of services over $600 during a calendar year, typically from small contractors and vendors. One of the mechanisms used to pay for the new federal health care law was an expansion of 1099 filing requirements to goods purchased, and purchases from corporations, starting in calendar year 2012. So, beginning in 2012, unless repealed, businesses will have to file a 1099 for every vendor that sells them more than $600 in goods.
The House offset the repeal by increasing the amount of health insurance subsidies that could be recaptured in cases where a family’s income exceed certain thresholds. The Senate passed its version of the 1099 repeal last month. The Senate version instructs the Office of Management and Budget to find unspent federal funds to use as an offset.
The Senate and House will have to work out their differences on the offset, before the measure can be sent to the President. President Barack Obama has indicated he supports the repeal, but his administration has voiced concerns with both the House and Senate offsets.
