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Case for the Paperwork Relief Act

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The expanded 1099 reporting requirement in the Affordable Care Act could affect small businesses starting with 2012 purchases and 2013 filings. The U.S. Small Business Administration supports the Small Business Paperwork Relief Act to repeal this provision.

As President Obama said on Nov. 3: “The 1099 provision in the health care bill appears to be too burdensome for small businesses. It just involves too much paperwork, too much filing. It’s probably counterproductive.” SBA’s support for the Small Business Paperwork Relief Act also follows the support in September for Senate Amendment 4595, which would have relaxed the reporting requirement. 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 unintended consequence of a potential paperwork burden resulting from this provision quickly came to light, and we immediately began working across the SBA to reduce the burden of these potential future reporting requirements. We gathered feedback and comments from the small-business community through roundtables, forums and other feedback mechanisms involving outreach from the SBA, the Treasury Department, the Internal Revenue Service and other groups.

Importantly, the repeal of this provision through the Small Business Paperwork Relief Act will not adversely affect the Affordable Care Act, which provides important health care benefits to millions of Americans. Small businesses already are taking advantage of the new tax credits for providing health insurance to employees this year, and future benefits such as the insurance exchanges in 2013 will provide small businesses with more negotiating power and reduced administrative costs. … We will continue to ensure that America’s entrepreneurs and small-business owners operate in an environment not burdened by excessive regulation, allowing you to continue doing what you do best: grow businesses, create jobs and lead America’s economic recovery.

-Karen Mills, SBA administrator
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