Bill Filed to Repeal Expanded 1099 Reporting

The new health insurance law requires employers to file a Form 1099 for all transactions over $600, including payments to corporations, beginning in 2012. This is an expansion of existing form 1099 reporting requirements. The provision was one of the revenue raisers for the health reform law, and is estimated to raise $17 billion.

On April 26, Rep. Dan Lungren (R-CA) introduced “The Small Business Paperwork Mandate Elimination Act” (H.R. 5141). The legislation would repeal the expanded 1099 reporting requirement and is the first bill introduced in Congress to overturn a part of the health care bill.

In his Dear Colleague letter, Rep. Lungren said unless this is repealed, small business owners will face an onerous tax reporting burden, and it will discourage companies from dealing with small businesses. "Businesses will think twice before purchasing goods and services from smaller companies ... It will be easier to rely on a single large supplier," Rep. Lungren said.

The bill was referred to the House Ways and Means Committee. It has more than 50 co-sponsors.

NAIFA Staff Contact: Diane Boyle, Vice President – Federal Government Relations, at (703) 770-8252.