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Columbus Global

Update: New Rules Require Rental Property Owners to Issue 1099s Starting With the Tax Year 2011


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On February 28th, we notified you that 1099 changes were coming and to start planning for the new law.  With the recent repeal of Expanded 1099 Reporting (see below), Form 1099 reporting is back to the way it was prior to enactment of the 2010 Patient Protection and Affordable Care Act and the 2010 Small Business Jobs Act.  Therefore, no changes are required in Microsoft Dynamics GP.  Please contact your consultant if you have any further questions on how this impacts GP. 

On April 14th, President Obama signed into law a bill to repeal expanded Form 1099 information reporting requirements for certain business payments and rental property expense payments.  

The H.R. 4 Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 specifically repeals:

  • the requirement for businesses, charities, and governmental entities to report payments to companies for merchandise purchased in the aggregate of $600 or more (originally effective for 2012),
  • the requirement for rental property owners to report expense payments in the aggregate of $600 or more (originally effective for 2011), and
  • the requirement for businesses, charities, governmental entities, and rental property owners to report payments for services and merchandise to corporations (other than attorneys and certain health care providers) in the aggregate of $600 or more (originally effective for 2012).

The repeals under the new law are retroactive, thus reinstating the status quo for Form 1099 reporting as established prior to enactment of the 2010 Patient Protection and Affordable Care Act and the 2010 Small Business Jobs Act.

In general, only businesses must report payments to service providers in the aggregate of $600 or more, and the current exception for not reporting payments made to corporations (except attorneys and certain healthcare providers) remains intact. Furthermore, rental property owners must report payments to service providers if their activities rise to the level of a trade or business.

If your organization is located in the Arizona or New Mexico area, contact Sherwood Systems for assistance in determining if a technology solution can help your organization better serve your business needs. (877) 943-9696

By Sherwood Systems – Arizona Microsoft Dynamics GP Partner

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