Some good news for businesses!
The expanded Form 1099 reporting rules for certain business payments and rental property expense payments have been repealed in a law just signed by President Obama.
Here’s the background on this issue. The 2010 health care legislation included a provision that would have required businesses that purchased goods and services from any vendor – including corporations – to file a Form 1099 if the total amount was $600 or more in a year. Both the vendor and the IRS had to receive a copy of the Form 1099.
A different 2010 law, the “Small Business Jobs Act,” imposed new Form 1099 reporting requirements on landlords. Effective for payments made after December 31, 2010, owners of rental property were generally required to file a Form 1099 for rental-related payments to any provider for services totaling $600 or more for the year.
On April 14, President Obama signed the “Comprehensive 1099 Taxpayer Protection and Replacement of Exchange Subsidy Overpayments Act of 2011” repealing the expanded reporting requirements. This means Form 1099 reporting for most payments made to corporations is not required, and reporting is not required for payments made in connection with rental properties.
If you need additional information about the Form 1099 reporting requirements, contact our office.