“We cannot help job-seekers by strangling the job-makers,” said Ben McKay, senior vice president of federal government relations for PCI. “We urge Congress to consider a full repeal of the 1099 provision before adjourning for the year.”
As passed, Section 9006 in the PPAC added a burdensome information reporting requirement that will present crushing administrative challenges to all businesses. Under the new provision, businesses would be required to file IRS Form 1099s for all payments totaling $600 or more during the calendar year to a single payee, including corporations. This provision is effective for payments made after December 31, 2011. This provision would apply to businesses of all sizes, charities and other tax-exempt organizations, and government entities.
“Without congressional action, this crushing provision stands to further delay our nation’s economic recovery and stifle future expansion for employers,” said McKay. “The 1099 provision in the new healthcare law would increase costs for businesses without any corresponding consumer benefit. We will continue to work with the U.S. Chamber of Commerce and business leaders to call for a full repeal of the 1099 reporting requirements.”
On September 14, the Senate considered two amendments to the Small Business Jobs Act, H.R. 5297, which were put forth to address the 1099 issue. Both amendments fell short of the 60 votes needed to clear procedural hurdles. As a result, the 1099 issue remains unresolved, and will continue to be a top issue for employers through the remainder of the 111th Congress and into 2011.
Making home, auto and business insurance companies pay for more government red tape in the form of substantial new accounting paperwork and IRS reporting burdens would impose real hardships on an industry that remains strong and stable and contributes to the economic foundation of our communities. Property casualty insurance companies provide over 480,000 jobs across the country and the insurance sector paid $14.7 billion in state premium taxes last year. The 1099 provision threatens to increase consumer costs for the close to 270 million insured homes and vehicles that are protected by property casualty insurers across the nation.