House Votes to Repeal the New Form 1099 Rules

On March 4, the House of Representatives by a vote of 314 to 112 passed H.R. 4, the Small Business Paperwork Mandate Elimination Act, now it's up to the  Senate to decide its fate.  The bill would retroactively repeal the new 1099 information reporting rules that I as well as many others believe would be an extreme record keeping burden on small businesses.

H.R. 4 makes up for the lost revenue from repealing the new information reporting provision by increasing the amount of “excess advance payments” of the premium assistance credit (enacted as part of the 2010 health care reform legislation to help lower-income individuals acquire affordable health insurance coverage) that a taxpayer must repay under Code Sec. 36B(f)(2) for tax years ending after Dec. 31, 2013. The credit is available for a taxpayer who doesn't receive health insurance through his employer (or his spouse's employer) and whose income falls between 100% and 400% of the federal poverty line, based on the most recently filed income tax return.  The net effect of these changes over the 2011–2021 period is reported to be a positive $166 million.

Although the Senate is likely to agree with the repeal of the 1099 rules it is not likely to agree with how to pay for it.  President Obama's office has already said that he is in agreement with the 1099 repeal but that he does not support H. R. 4's plan for offsetting the cost of the repeal of the 1099 requirements.