Great news for small businesses! The 1099 tax-reporting requirement in the Affordable Care Act (ACA) is dead. Well, almost. It will be when President Obama signs the U.S. Senate bill that passed yesterday.
The House voted earlier this month to repeal the 1099 provision, which would require businesses to report annual purchases from a vendor that totaled more than $600 to the IRS. It was included in the ACA to raise about $19 billion over 10 years to help pay for healthcare reform. The theory is that this much tax revenue is never collected due to unreported business income.
According to a story in The Hill, the “repeal will be paid for by forcing families whose income unexpectedly exceeds certain levels to repay subsidies they received from the federal government.”
Whether this payment plan works or not, the small business organizations, like the Small Business Chamber, that have strongly advocated for this change are very pleased. This is the first repeal of part of the ACA…and hopefully the last.
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