Say it is so-1099’s legislation may be on hold for now
For those of you that don’t know and there are a lot of us. One the provisions in the almost one year old Healthcare law is that under section 6041 of the tax code, businesses making payments totaling at least $600 to another person or business in a single year are required to file an information return to the Internal Revenue Service. This tax form is typically known as a 1099.
These payments are usually to outside consultants, contractors, vendors, etc. Payments that typically require the reporting requirement include rent, salaries, wages, premiums, annuities, compensations and remunerations.
A new provision added by the Affordable Care Act states that, after January 31, 2011, this list will also include goods and merchandise. Businesses, nonprofits and governments will be required to send copies of the 1099 form to their vendors and contractors. Congress' Joint Committee on Taxation estimates that this requirement will increase government revenues by encouraging tax reporting by $17 billion over 10 years, helping to offset provisions in the bill that increase federal government costs.
But wait, just last week a bipartisan bill in the Senate that would repeal the unpopular 1099 provision in the healthcare law garnered 60 co-sponsors on Thursday, giving the legislation its best chance at passage so far. This would a great for many people who can barely keep up with the day to day duties as it is. There will be more changes to come, but for now let’s just try and fix what can be fixed and hope for the best.