The United States House of Representative recently passed H.R. 4, known as the “Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011.” H.R. 4 is an Act “[t]o repeal the expansion of information reporting requirements for payments of $600 or more to corporations . . . .” Specifically, H.R. 4 would repeal the recently expanded Form 1099 tax reporting requirements.
Section 9006 of the Patient Protection and Affordable Care Act requires a business to file a Form 1099 whenever they pay more than $600 per year to a vendor, including payments to corporations. This reporting requirement was to become effective for payments made after 2011. H.R. 4 would repeal this reporting requirement.
The Small Business Jobs Act of 2010 provides that a person who receives rental income from real estate is considered to be in the trade or business of renting property. Therefore, persons who receive rental income are subject to the same reporting requirements as taxpayers engaged in a trade or business. H.R. 4 would also repeal the imposition of reporting requirements on recipients of real estate income.
To provide an offset for the revenue that will be lost due to its provisions, H.R. 4 “would increase the amount of excess advance payments of the premium assistance credit.” Proponents of the bill claim that this increase will reduce the federal deficit by $166 million. H.R. 4 will now go to the Senate for consideration.
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