The legislation repeals the provision within the 2010 Patient Protection and Affordable Care Act requiring businesses, charities and state and local governments to issue a Form 1099 for payments to corporations for purchases of goods and services that exceed $600 per year. The new legislation also repeals an expansion of the 1099 reporting rules for services provided to landlords, which was enacted under the Small Business Jobs Act in September. These provisions were argued to be a big thorn in the side of many small businesses. Shortly after its passing, the original bill gained broad bipartisan support for its repeal.
Upon signing the new legislation, the President stated that "Small business owners drive our economy and we want to ensure they spend their time and resources creating jobs and growing their business, not filling out more paperwork."
The original expanded 1099 requirement was touted as a method to bring in income that had been unreported. The cost of the repeal will be paid for with modifications to the limitations on amounts required for repayment of advance premium assistance tax credits for health insurance.
Should you have any questions about this Tax Flash, contact your Marcum Tax Professional.