Tuesday, August 31, 2010

Senate to vote on repeal of Form 1099 health reform provision

The Senate is scheduled to vote on September 14 on two amendments to an unrelated bill that would alter the 1099 provision. One amendment would exempt businesses with fewer than 25 employees, raise the reporting threshold to purchases above $5,000, and exclude those purchases made with a credit card, while the other amendment would eliminate the provision completely.

The original provision would require businesses to file 1099 tax forms on any purchases of goods or services above $600. The provision was designed to prevent tax evasion and was projected to raise $17.1 billion over 10 years.

While Democrats have been reluctant to consider repealing or modifying such a substantial funding source for health reform, the uproar from small businesses has caused members of Congress from both parties to take notice.

For more information on the provision, please see our initial post: Form 1099 tax change in health reform law exposed.

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