Some 1099 Reporting Mandates Still Exist for Small Business Owners

Date: May 03, 2016

NFIB successfully lobbied to repeal the new Form 1099 requirement from the Patient Protection and Affordable Care Act (PPACA).

In early 2011, NFIB successfully led the fight in Congress to repeal the expensive and burdensome tax paperwork requirement that was included in the Patient Protection and Affordable Care Act of 2010, the national healthcare law. The mandate would have expanded the requirement to use a Form 1099-MISC to include the purchases of goods and services from businesses.  Businesses who currently file dozens of 1099’s a year would have found themselves filing hundreds or thousands instead. The details of this huge grassroots accomplishment, including press releases and voting records of Congress can be found here.

While the Form 1099 requirement in the PPACA was repealed, other pre-PPACA Form 1099 laws still exist.

Although the Form 1099 requirement was repealed, small business owners should be aware that other mandates still exist that require business owners to send 1099s to the IRS:

  • Small business owners are required to send 1099s to non-corporation service providers. This law has been on the books for several years. An example of a non-corporation service provider is an independent contractor that cleans the windows of a business or landscapes a business property.

Please check out the Third Party Reporting Center on the IRS website for more details and guidelines regarding existing 1099 requirements. 

The tool is not intended as tax advice and small business owners should contact their accounting professional for specific guidance related to their businesses, employees and particular business situation.


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