President Obama has signed H.R. 4 – a bill that will repeal the Form 1099 reporting provision created by Patient Protection and Affordable Care Act (PPACA) Section 9006 – into law.
If PPACA 9006 Section 9006 had taken effect as written, it would have required a business entity to file a 1099 miscellaneous income reporting form with the Internal Revenue Service for a vendor whenever it had $600 or more in transactions with that vendor in a given tax year.
The provision would have taken effect in January 2012.
Small business groups had argued that the provision would create a paperwork nightmare, forcing independent contractors to file a Form 1099 whenever they bought a computer or a suite of office furniture from a large retailer.
The new law created by H.R. 4, the “Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011,” also repeals a separate Form 1099 information reporting requirement that would have been imposed on owners of rental real estate.
Analysts have estimated repeal of PPACA Section 9006 will cost $19 billion over 10 years. Drafters of the repeal law have paid for repeal by adjusting a PPACA health insurance subsidy program that is set to start up in 2014.
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