H.R. 3991 – Small Business Paperwork Savings Act

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Updated January 20, 2026 at 8:42 AM UTC

The Small Business Paperwork Savings Act raises the amount at which businesses must file information returns for certain payees, lowering reporting burdens for small transactions. It changes the threshold from $600 to $5,000 and adds an automatic inflation adjustment for future years. The changes apply to payments made after Dec. 31, 2023 and affect reporting and backup‑withholding rules under the Internal Revenue Code.

Key Provisions

Increases the reporting threshold in Section 6041(a) from $600 to $5,000.
Adds an inflation‑adjustment rule that raises the threshold each year after 2024 based on the cost‑of‑living index, rounded to the nearest $100.
Updates related sections (6041A and 3406) to use the new threshold for reporting remuneration and backup withholding.
Makes conforming changes to headings and terminology and sets the effective date for payments after Dec. 31, 2023.

Legislative Activity

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1 earlier action

HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

June 9, 2023

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HouseIntro Referral

Introduced in House

June 9, 2023

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

June 9, 2023

Bill Text

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Introduced in HouseIssued June 9, 2023

I

118th CONGRESS

1st Session

H. R. 3991

IN THE HOUSE OF REPRESENTATIVES

June 9, 2023

Mr. Schweikert (for himself, Ms. Tenney, Mr. Ferguson, Ms. Van Duyne, Mrs. Miller of West Virginia, Mr. Steube, Mr. Smith of Nebraska, and Mr. Wenstrup) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to increase the threshold for requiring information reporting with respect to certain payees.

1.

Short title

This Act may be cited as the Small Business Paperwork Savings Act.

2.

Increase in threshold for requiring information reporting with respect to certain payees

(a)

In general

Sections 6041(a) of the Internal Revenue Code of 1986 is amended by striking $600 and inserting $5,000.

(b)

Inflation adjustment

Section 6041 of such Code is amended by adding at the end the following new subsection:

(h)

Inflation adjustment

In the case of any calendar year after 2024, the dollar amount in subsection (a) shall be increased by an amount equal to—

(1)

such dollar amount, multiplied by

(2)

the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting calendar year 2023 for calendar year 2016 in subparagraph (A)(ii) thereof.

If any increase under the preceding sentence is not a multiple of $100, such increase shall be rounded to the nearest multiple of $100.

.

(c)

Application to reporting on remuneration for services and direct sales

Section 6041A of such Code is amended—

(1)

in subsection (a)(2), by striking is $600 or more and inserting equals or exceeds the dollar amount in effect for such calendar year under section 6041(a), and

(2)

in subsection (b)(1)(B), by striking is $5,000 or more and inserting equals or exceeds the dollar amount in effect for such calendar year under section 6041(a).

(d)

Application To backup withholding

Section 3406(b)(6) of such Code is amended—

(1)

by striking $600 in subparagraph (A) and inserting the dollar amount in effect for such calendar year under section 6041(a), and

(2)

by striking only where aggregate for calendar year is $600 or more in the heading and inserting only if in excess of threshold.

(e)

Conforming amendments

(1)

The heading of section 6041(a) of such Code is amended by striking of $600 or more and inserting exceeding threshold.

(2)

Section 6041(a) of such Code is amended by striking taxable year and inserting calendar year.

(f)

Effective date

The amendments made by this section shall apply with respect to payments made after December 31, 2023.