Obama signs 1099 repeal into law

The new tax requirement that would have required more 1099 paperwork has been repealed.

President Obama signed the repeal yesterday, meaning the tougher reporting requirements included as part of the Patient Protection and Affordable Care Act passed last year won't take effect in 2012 as scheduled.

The rules would have required more paperwork for most small businesses, with companies required to file 1099s for any individual or company they do more than $600 of business with in a given year. (You can read a more detailed explanation in our previous coverage.)

Small business advocates had said the requirement would cost small businesses thousands of dollars a year in extra time and labor to track and file the extra 1099 forms. The requirement was an attempt to collect an estimated $22 billion in taxes on unreported income.

The bill, passed by the Senate earlier this month and by the House in March, covers the estimated $22 billion cost by requiring some people to repay their health insurance exchange subsidies if their income rises after they qualify for the federal subsidies.