The House Ways and Means Committee has posted more analyses of two 1099 reporting fix bills, H.R. 4 and H.R. 705.
The original version of H.R. 4, a 1099 fix bill introduced Jan. 12 by Rep. Daniel Lungren, R-Calif., has 272 cosponsors and would simply repeal Section 9006 of the Patient Protection and Affordable Care Act (PPACA), a component of the Affordable Care Act package.
H.R. 705, a bill introduced Tuesday by Ways and Means Chairman Dave Camp, R-Mich., would cancel the effects of PPACA Section 9006 by changing Section 6041 of the Internal Revenue Code, to eliminate the effects of an expanded real estate expense reporting requirement that was included in another new law, and impose a tougher health insurance purchase subsidy clawback provision.
Starting in 2012, PPACA Section 9006 is supposed to require a business to send a Form 1099 to the Internal Revenue Service (IRS) for each vendor with whom the business conducts more than $600 of business in a given tax year.
Ways and Means did not yet have a bill number when it first posted the Camp bill Wednesday. Ways and Means now has posted the bill number of H.R. 705 and also posted an amended version of the bill that would make the clawback change effective for taxable years ending after Dec. 31, 2013.
Camp also has offered an amended version of H.R. 4 that would cancel the effects of PPACA Section 9006 by changing Internal Revenue Code Section 6041 rather than repealing PPACA Section 9006.
The original version would have applied to taxable years beginning after Dec. 3, 2013.
THE CLAWBACK PROVISION
Republicans in Congress are trying to repeal PPACA, change it or block implementation, but, if the act takes effect as written, the act will subsidize some individuals’ purchases of health coverage through a tax credit that will be provided in advance, so that taxpayers can use the credit to buy health coverage.
Taxpayers will be using tax returns from two years before the credit payments begin to apply for the credit, and members of Congress have speculated that some taxpayers might understate their income to get bigger subsidies.
Congress has allowed the IRS to get excess advance credit payments back from taxpayers, but, to protect low-income and moderate-income taxpayers, Congress has put a cap on how much of the advance credit payments the IRS can claw back from taxpayers earning less than 500% of the federal poverty level.
Camp has proposed paying for the cost of canceling the effects of PPACA 9006 by increasing health tax credit clawback revenue by making the clawback cap available only to taxpayers earning less than 400% of the federal poverty level.
- Allison Bell