On April 14, 2011, President Obama signed legislation that repeals the expanded Form 1099 reporting requirements under the Patient Protection and Affordable Care Act (PPACA) and the Small Business Jobs Act of 2010.
The new legislation eliminates the requirement to expand tax information reporting, beginning in 2012, for payments in excess of $600.00 either (i) for the purchase of goods or merchandise; or (ii) made to a corporation, on Forms 1099-MISC. The legislation also eliminates the requirement that recipients of rental income from real estate, but who are not otherwise considered engaged in the trade or business of renting property, be required to issue Forms 1099-MISC reporting payments of $600.00 or more that are made in the course of earning the rental income (for payments to a service provider, such as a painter, plumber, or accountant). Before the enactment of PPACA, payments under each of these circumstances, or to these categories of recipients, would generally have been exempt from the tax information reporting rules under Section 6041(a) of the Code and the Regulations thereunder.
For more information please contact your regular McDermott attorney.