In addition to providing tax breaks that will benefit small businesses this year and next, the recently enacted Small Business Jobs Act of 2010 expands Form 1099 information reporting requirements for independent landlords as of Jan. 1, 2011.
This is the most recent change to the 1099 reporting requirements, which were expanded by the health care reform law to require businesses to provide information on corporations they paid $600 or more in a given year. It has been estimated that this could increase the number of 1099s small businesses must file from approximately 10 to almost 100 per year.
NAHB has submitted comments to the Treasury Department opposing the new rule, and is working within a large coalition of business groups to seek congressional repeal. Unlike the independent landlord provision, the health care reform legislation's requirement does not take effect until Jan. 1, 2012.
The new 1099 requirement in the small business legislation expands 1099 reporting to independent landlords. Under prior law, taxpayers whose primary trade or business was rental real estate — such as owners of multifamily apartment buildings — were subject to standard reporting requirements. However, taxpayers whose primary trade or business was not rental real estate — such as owners of a second home used for rental purposes — were not subject to 1099 reporting requirements.
The small business legislation changes the law so that independent landlords must now submit 1099s to businesses with which they have more than $600 of annual business.
NAHB will continue to oppose all the expansions of the 1099 requirements because they are administratively burdensome for small businesses.
For more information, e-mail Robert Dietz at NAHB, or call him at 800-368-5242 x8285.
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