Tax Change Due to New Health Care Law

For all businesses, including ALS' member libraries - there is a provision in the new Health Care Law that has nothing to do with health care - a requirement that companies issue 1099 forms at year end to ANY individual or corporation from which they purchase more than $600 worth of goods or services. Typically these 1099 forms were only required to be issued to individuals for costs other than wages or salaries. For many libraries, this would apply to independent contractors.

This would mean that your library would be required to issue a 1099 for anyone you paid $600 or more - for utilities, books, furniture, etc.

The rationale for this is explained in a CNNMoney.com article that can be found here, which states "the final impact of the law won't be known until the IRS issues its regulations on the new law, which aren't expected to arrive until sometime next year. The IRS has not yet commented on when it will release regulations or schedule public hearings, and an agency spokesman was unsure when it will do so. The new requirements kick in January 1, 2012."

So - we have some time to get prepared - or get your bookkeepers, board treasurers, or accountants ready.