President to Consider Dropping 1099 Requirement From Health Care Law

Last week, following mid-term elections that saw Republicans take control of the House, President Obama stated he would be willing to consider repealing a provision in the health care bill that requires businesses to file tax forms for any transaction over $600 with a single vendor.

Republicans have repeatedly promised to repeal the Affordable Care Act, though President Obama has stated that he would veto any attempt to do so. However, during a press conference on November 4, the president said he would consider working with the GOP on ways to improve the health care bill, such as dropping the 1099 reporting requirement, if they have “ideas for how to improve our health care system.”

“I know one of the things that’s come up is that the 1099 provision in the health care bill appears to be too burdensome for small businesses,” the president said. “It just involves too much paperwork, too much filing…. It was designed to make sure that revenue was raised to help pay for some of the other provisions, but if it ends up just being so much trouble that small businesses find it difficult to manage, that’s something that we should take a look at. So there are going to be examples where I think we can tweak and make improvements on the progress that we’ve made.”

The law is due to take effect January 1, 2012. At present, businesses are required to file 1099 forms for purchases of services of $600 or more each year from unincorporated businesses such as sole proprietorships, according to Medscape Medical News. The health care bill extends this requirement to cover purchases of property and goods in addition to services from all businesses, including corporations, MMN reported.