We recently wrote how the federal Small Business Jobs Act, signed into law on September 27, 2010, included a little-noticed and controversial provision (Section 2101) that extended the information reporting requirements applicable to taxpayers engaged in a trade or business to real estate rental property owners. The new law for the first time would have required those rental property owners to issue a Form 1099 to each service provider to which the property owner made a payment of $600 or more in any year.

Retroactively Repealed

With the ink barely dry on the 2010 legislation, the U.S. House and U.S. Senate recently approved H.R. 4,1 which retroactively repeals this new information reporting provision and permits real estate rental property owners to proceed as if Section 2101 of the Small Business Jobs Act were never enacted. The principal impacts of this retroactive repeal are that real estate rental property owners will not be required to make informational filings for payments to their service providers or implement the expanded record-keeping program that the filing requirement would have necessitated.2