Repeal of the 1099 Reporting Provision
On April 14, 2011, President Obama signed into law the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 to rescind the Form 1099 tax reporting requirement included in the Patient Protection and Affordable Care Act (PPACA) of Heath Care Reform.
Under the reporting requirement, businesses would have been required to issue a Form 1099-MISC to corporations as well as non-corporate entities, and it would have applied to the purchase of goods, as well as services for any person or company to whom they paid more than $600 in a tax year. The tax filing requirement did not directly relate to health care but was initially included as a funding measure for the health care bill by reducing un-reported and under-reported income that would otherwise be taxable. However, small firms and self-employed individuals voiced concerns that the requirement would bury them in paperwork.
In addition, the law also repeals the expanded Form 1099-MISC reporting under the Small Business Jobs Act of 2010 that required individuals who receive rental income from real estate to report rental property expenses on Form 1099-MISC.
The original requirements were expected to raise nearly $17 billion over 10 years by making it easier for the IRS to identify and pursue businesses and individuals that did not report the required information. The new law makes up for the lost revenue by, beginning in 2014, requiring individuals who receive tax subsidies in excess of what they are eligible for in state health care exchange health insurance plans, to pay back a greater share than formerly required under PPACA.
Paychex Insurance Agency Can Help
Paychex Insurance Agency is a full-service organization that has taken a leadership role in transforming how businesses like yours adapt to and benefit from the rapidly changing insurance industry. We're ready to offer information and assistance to help you navigate the recent Health Care Reform initiatives.
We can help:
- Provide you with information if you're interested in additional insurance options.
- Educate you on the new requirements during health plan renewal.
- Provide resources to help you explain the changes to your employees.
- Follow the latest regulations to keep you informed about any legislative changes that affect you and your business.
Health Care Reform Updates
With access to legislative and regulatory specialists in Washington, D.C. and expert, in-house sources of legal and compliance guidance, Paychex Insurance Agency is your source for Health Care Reform knowledge, tools, and resources.
Whether you're looking for a Business Owner Policy, Workers' Compensation insurance or group health and life insurance, Paychex Insurance Agency offers flexible, scalable insurance solutions for you, your business and your employees. To learn more about how we can meet your insurance needs, call 877-393-8868 or have an agent call you.
The Department of Health and Human Services and the Internal Revenue Service (IRS) continue to provide specifics and guidance on the Health Care Reform Act. Paychex will monitor these regulatory developments and provide updates as appropriate.
The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. It is provided for informational purposes only. If you require legal or accounting advice, or need other professional assistance, you should always consult your licensed attorney, accountant, or other federally licensed tax professional to discuss your particular facts, circumstances, and business needs.
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