Expanded Form 1099 Reporting Requirements Repealed

By Matthew B. Dopkin, Esq.

On April 14, 2011, the President signed into law H.R. 4, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (“the Act”). The Act repealed the expanded 1099 reporting requirements for businesses and rental property owners previously added to the Internal Revenue Code by the Patient Protection and Affordable Care Act and the Small Business Jobs Act of 2010.

In accordance with the Act, corporate taxpayers and taxpayers receiving rental real estate income are no longer required to submit a Form 1099 to the IRS for payments made to any single vendor for goods and services totaling more than $600 annually. The expanded Form 1099 reporting requirements for corporate taxpayers had been scheduled to apply to payments made after December 31, 2011, while the requirements for taxpayers receiving rental income from real estate applied to payments made after December 31, 2010.

The Act’s repeal of the expanded Form 1099 reporting requirements is offset by an increase in the health care tax credit that can be recaptured from taxpayers in cases of overpayment. The credit will be available to those who enroll in a health insurance plan offered through an “exchange” beginning in 2014. The Joint Committee on Taxation estimated the offset will raise $24.9 billion over ten years and that repealing the expanded Form 1099 reporting requirements will save taxpayers $24.7 billion over that same ten-year period.

Dopkin Law Firm works advises clients on the intricacies of avoiding unnecessary taxes and to guide them to successful and prosperous enterprises. To discuss these or other issues with attorney and CPA Matt Dopkin, contact us at 856-685-4415 or 215-519-4269, or via email.

This Alert is published by Dopkin Law Firm. It is provided solely as legal information, not legal advice. Legal advice depends, to a large extent, upon the particular facts of a matter. For legal advice, contact your legal advisor.