SBA Backs Repeal of 1099 Reporting
In an open letter to small business owners, SBA Administrator Karen Mills described requirements that small businesses report all transactions greater than $600 as "burdensome," and called for their repeal.
Under the Affordable Care Act, all businesses that pay another individual or business $600 or more for goods or services starting in 2012 will be required to issue 1099s. The Small Business Paperwork Relief Act, introduced by Sen. Max Baucus (D-Mont.), would repeal this provision.
"The unintended consequence of a potential paperwork burden resulting from this provision quickly came to light, and we immediately began working across the administration to reduce the burden of these potential future reporting requirements," Mills wrote in a Nov. 19 letter.
Mills said she first informed small business owners of the 1099 requirement in May. The repeal of this provision through the Small Business Paperwork Relief Act will not adversely affect the Affordable Care Act, which provides health care benefits to millions of Americans, she noted.