1099 Rules Change with Healthcare Bill

We wanted to take this time to inform you of some upcoming MAJOR changes to 1099 Information Reporting Laws that were included in the Healthcare Bill. Effective for payments made AFTER December 31, 2011, companies will be required to issue 1099-Misc for all payments. There will no longer be an exemption for corporations. There is also a new requirement to report payments for property such as goods, materials, merchandise, supplies, etc. In essence, you will be required to issue 1099’s to everyone you issue checks. The penalty is increasing from a maximum of $250,000 to 1.5 million. The penalty per 1099 is increasing from $50 per return to $100 per return. Although these changes will not go in effect until 2012, it’s never too late to start planning ahead. As we recommended in the seminar, it’s always a good idea to have ALL vendors complete a W-9 for your records.