February 25, 2011

Repeal of new 1099 rule near vote

The House is poised to begin consideration Wednesday of a bill that would carry out NAFCU-sought repeal of increased 1099 reporting due to begin in 2012 under the health-care reform law.

The reform law requires all small businesses, including credit unions, to send a 1099 form to any vendor from which they purchase at least $600 in good and services. They would have to send a copy of that to the IRS as well. The provision is set to take effect Jan. 1.

Two bills have been approved by the House Ways and Means Committee to stop the requirement: H.R. 4, which simply repeals the increased reporting; and H.R. 705, which also provides for an offset to anticipated lost revenue. That measure also eliminates other provisions of the health-care statute and some current 1099 reporting by rental property owners.

The House Rules Committee, set to meet at 3 p.m. Wednesday, is expected to substitute the text of H.R. 705 for the text of H.R. 4, then send H.R. 4 to the House.

NAFCU urged repeal of the added reporting requirement in a letter earlier this month to House Ways and Means Chairman Dave Camp, R-Mich., and Ranking Member Sander Levin, D-Mich. The proposal has strong bipartisan support, and the president has indicated he would sign it if passed.