President Obama late Thursday signed into law legislation repealing the 1099 reporting provision enacted as part of the healthcare reform bill.
Several insurance industry trade groups issued statements lauding the president’s decision.
The repealed provision would have required all business entities to file a 1099 form with the Internal Revenue Service for each vendor for whom they have cumulative transactions of $600 or more. It would have gone into effect in January 2012.
The legislation also repeals an additional Form 1099 reporting requirement imposed on owners of rental real estate.
The 1099 provision was expected to contribute $19 billion toward paying for healthcare reform. The repeal legislation makes up the shortfall by making consumers repay all of their insurance subsidies under the healthcare law once their income rises beyond 400 percent of the federal poverty line.
House Democrats called that a tax increase on the middle class.
Obama signed the bill, which was defeated several times, despite taking issue with the ways it’s paid for: a “clawback” provision that goes after people who get more in healthcare subsidies than entitled to under the healthcare reform law.
“Today, I was pleased to take another step to relieve unnecessary burdens on small businesses by signing H.R. 4 into law,” reads the president’s signing statement. “Small business owners are the engine of our economy and because Democrats and Republicans worked together, we can ensure they spend their time and resources creating jobs and growing their business, not filling out more paperwork. I look forward to continuing to work with Congress to improve the tax credit policy in this legislation and I am eager to work with anyone with ideas about how we can make health care better or more affordable.”