Compliance
Compliance Alerts: 1099-K Thresholds and Car Loan Reporting Requirements
To stay compliant under recent IRS rules, understand when to file Form 1099-K and when lenders must report interest received under OBBB—with new relief and deadlines in play.
By NomadicTax Research Team • 5-8 min read • November 15, 2025
## Recent IRS Compliance Updates
Two major updates from the IRS affect compliance for payors and lenders under the One, Big, Beautiful Bill:
- **Form 1099-K Reporting Threshold Reversion**: As per Fact Sheet 2025-08, third-party settlement organizations must report on 1099-K only if both:
• Gross payments to a payee exceed **$20,000**, and
• The number of transactions exceeds **200**.
This reverts to pre-ARPA thresholds. ([irs.gov](https://www.irs.gov/newsroom/irs-issues-faqs-on-form-1099-k-threshold-under-the-one-big-beautiful-bill-dollar-limit-reverts-to-20000?utm_source=openai))
- **Car Loan Interest Reporting & Relief**: Under section 6050AA, recipients of interest on qualified passenger vehicle loans must file information returns when they receive **$600 or more** from an individual. For 2025, IRS offers **transitional relief**: lenders who provide statements of interest received by Jan. 31, 2026, via acceptable methods, will not face penalties. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-transition-relief-for-2025-for-businesses-reporting-car-loan-interest-under-the-one-big-beautiful-bill?utm_source=openai))
## Key Deadlines & Thresholds at a Glance
| Rule | Reporting Threshold | Deadline | Penalties Relief Available? |
|---|---|---|---|
| Form 1099-K (third-party payments) | > $20,000 **and** > 200 trans. per payee | Filed annually (calendar year) | Yes under new law effective immediately retroactive to ARPA changes. ([irs.gov](https://www.irs.gov/newsroom/irs-issues-faqs-on-form-1099-k-threshold-under-the-one-big-beautiful-bill-dollar-limit-reverts-to-20000?utm_source=openai)) |
| Car Loan Interest Reporting | $600 or more interest from an individual | Statement by Jan. 31, 2026; returns as required | Penalties relief if statement provided in acceptable form. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-transition-relief-for-2025-for-businesses-reporting-car-loan-interest-under-the-one-big-beautiful-bill?utm_source=openai)) |
## Actionable Steps for Businesses & Payors
- **Payment Settlement Entities** should update systems to enforce the two-part threshold (dollar and transaction count) for 1099-K reporting. Also, understand which payments qualify and differentiate goods/services from other payments.
- **Lenders & Dealerships**: Ensure statements of interest (monthly, portal, or annual) are provided for QPVLI interest amounts. If interest ≥ $600, prepare for required reporting.
- **Tax Preparers & Advisors**: Review client financial transactions for potential reporting obligations. Advise clients who might crossover thresholds.
- **Documentation & Systems Updates**: Maintain accurate records, update systems now to capture transactions, interest amounts and statement issuance.
## Example Situations
- **Example 1**: An online marketplace processes 250 payments of $150 each to a seller in 2025. Gross payments $37,500. Because both conditions (>200 transactions and >$20,000) are satisfied, a 1099-K must be issued.
- **Example 2**: A car dealership finances 30 qualifying loans in 2025. If any individual client pays $600+ interest, dealership must report, but if the interest statement is provided by Jan. 31, 2026 through a portal or statement, penalties are relief-protected.
**Category**: Compliance
**TaxHome**: US
**Author**: NomadicTax Research Team
**ReadTime**: 5-8 min
**Published**: true