1099 Reporting Requirements-Patient Protection and Affordable Care Act

By Dr. Mark Lutschaunig, Director of the GRD

The new healthcare law contains a tax information reporting requirement that will impact all small businesses. Currently, businesses utilize Form 1099 to report any service-related transactions over $600 involving an unincorporated business (sole proprietor, partnership and LLC). Beginning in 2012, Section 9006 of the Patient Protection and Affordable Care Act would subject businesses to data collection and information filing on virtually all business-to-business transactions they make aggregating $600 or more in a year.

The AVMA recognizes that this provision would place a tremendous paperwork compliance burden on many of our small business owners and supports legislation that would repeal this section of the healthcare law. Please contact your Member of Congress and ask them to cosponsor this important legislation.

In the meantime, businesses should prepare to comply with this new reporting requirement and contact their tax consultant for additional information. Since Form 1099 requires a federal identification number, all businesses should obtain a Tax Identification Number (or Employer Identification Number) from the IRS. The alternative would be to use an individual's Social Security number, which, given the new reporting requirement, may put that individual at an increased risk for identity theft.

For more information, please contact Dr. Mark Lutschaunig.