Compliance February 13, 2004
IRS Issues Notice 2004-16
February 13, 2004 (PLANSPONSOR.com)-The Internal
Revenue Service (IRS) issued Notice 2004-16 stating that it
will not be required for any employers to issue 1099 forms
for all payments made by health FSAs and HRAs through
employee debit, credit, and stored-value cards.
Reported by Alison Cooke
>Previously, in May 2003, the IRS had made a ruling that payments made from debit health cards directly to medical service providers would need to be reported on 1099 forms. However, with the passage of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, Form 1099 was not required for payments made after December 31, 2002. This lastest ruling means there will be no 1099 reporting requirements for any FSA or HRA payments, even those made before December 31, 2002.
>The notice can be found at http://www.irs.gov/pub/irs-drop/n-04-16.pdf .