Compliance
Compliance Checklist: Navigating Reporting Requirements Under OBBBBA
The One, Big, Beautiful Bill introduces multiple new reporting obligations—tips, overtime, vehicle loan interest, remittance taxes—all with transition relief and phase-ins. Use this checklist to stay compliant.
By NomadicTax Research Team • 5-8 min read • November 24, 2025
## Understanding Your Obligations
With Public Law 119-21 (OBBBBA), new reporting duties begin in **2025**, many with **transition relief** to help businesses and payors adjust. Key areas include tips, overtime, interest, and remittances. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
## What Employers, Lenders, and Payors Need to Do
- **Tips & Overtime**: Employers/other payors must issue statements showing amounts paid or received as “qualified tips” or “qualified overtime compensation” and file information returns. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
- **Car Loan Interest Reporting**: Lenders must provide information returns and statements to borrowers showing total interest received on qualifying passenger vehicle loans. Transitional relief for 2025: Statements must just be made available (online portal, monthly statement, etc.) to avoid 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))
- **Remittance Transfer Tax**: Remittance transfer providers are to collect a 1% excise tax from senders in specified instances and file quarterly returns; deposits start semimonthly in Jan 2026. Notice 2025-55 provides relief from penalties for early noncompliance. ([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/topics-in-the-news?utm_source=openai))
## Key Deadlines and Effective Dates
- **Tax year 2025**: Many new deductions and reporting begin. Transition relief applies for many obligations. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors?utm_source=openai))
- **Oct 2, 2025**: IRS must publish list of occupations for “qualified tips.” ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors?utm_source=openai))
- **Beginning Jan 1, 2026**: Certain remittance deposits become due; other features phase-in. ([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/topics-in-the-news?utm_source=openai))
## Common Pitfalls to Avoid
- Failing to report qualified tips or overtime because occupation isn’t yet published or understood. Use the upcoming IRS published list.
- Using wrong vehicle data: Misidentifying whether the vehicle had **final assembly** in the U.S., or misreporting VIN.
- Overlooking MAGI phase-outs. Deductions can disappear if income gets too high.
- Delay in adjusting withholding: If you expect to use new deductions, not updating Form W-4 may lead to under- or over-withholding.
- Missing remittance tax obligations, especially those only beginning in 2026.
## How to Use Transition Relief Wisely
- For car interest reporting in 2025, lenders can avoid penalties if they simply provide statements in acceptable forms (online, monthly, etc.). ([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))
- For tips and overtime reporting, employers/payors have relief if they make good faith effort during the transition year.
- Remittance providers get deposit penalty relief for first three quarters of 2026. Plan for full compliance early. ([eitc.irs.gov](https://www.eitc.irs.gov/newsroom/topics-in-the-news?utm_source=openai))
## Practical Compliance Steps
1. Audit your payroll systems to code overtime and tip income separately and collect necessary SSNs.
2. Determine which of your customers or employees qualify under “qualified tips” and “qualified overtime.”
3. For lenders: confirm which loans are “qualified passenger vehicle” loans and ensure interest tracking with VIN, lien status, origin date.
4. Update or draft withholding notices to reflect new standard deduction, child tax credit, and deductions.
5. Consult Form W-4 Step 4(b) deduction worksheet for 2025; verify TWE updates. ([irs.gov](https://www.irs.gov/forms-pubs/how-to-update-withholding-to-account-for-tax-law-changes-for-2025?utm_source=openai))
By proactively meeting these compliance tasks in 2025 and into 2026, businesses and payors can reduce risk, avoid penalties, and benefit fully from OBBBBA’s reforms.