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Commercial Card News Brought to You by the NAPCP: Industry Regulation

IRS Notice 2010-91 provides 1099 reporting relief for government card programs

Wednesday, December 8, 2010   (0 Comments)

Previously, the NAPCP announced final regulations (issued by the IRS in August 2010) pertaining to the impact of IRC section 6050W on end-users' card programs. Now there is more good news.

According to IRS Notice 2010-91 (issued in December 2010), section 3402(t) withholding requirements and the related reporting requirements will not apply to card payments until further guidance is issued by the IRS. Prior to this notice, government agencies were required to begin withholding 3% on card payments starting in 2012. Now that this requirement is eliminated for card payments, but not for other payment methods, this gives end-user organizations even more incentive to increase the utilization of card products (e.g., P-Cards, electronic payables, etc.).

Note: It's possible that "further guidance” (as specified in the IRS notice) may never occur, essentially making this change permanent. The IRS simply needs the flexibility to make changes in the future if, for example, backup withholding becomes possible within the card infrastructure.


Members, click here to review the latest news pertaining to 1099 reporting changes, including a copy of Notice 2010-91. The NAPCP thanks Visa for providing information related to these changes.

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