Compliance
Compliance Checklist: New Reporting and Penalty Relief under the One, Big, Beautiful Bill
New reporting duties and relief provisions under OBBB impact how and when you file—including Form 1099-K, vehicle loan interest, tips and overtime reporting—and which penalties may be waived if you're compliant.
By NomadicTax Research Team • 5-8 min read • November 23, 2025
## Understanding Compliance Requirements & Reliefs under OBBB
The One, Big, Beautiful Bill Act, signed July 4, 2025, ushers in major changes affecting income reporting, information returns, and penalties. Some requirements are brand-new; others enforce existing rules differently. Here’s what you must know to stay ahead.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
### Key Compliance Updates
| Subject | What’s New | Effective Date / Notes |
|---------|------------|-------------------------|
| **Form 1099-K Threshold** | Reverting to pre-ARPA rules: reporting is triggered only if payments to payee exceed **$20,000** **and** # of transactions exceed **200**.([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)) | Retroactive under OBBB—applies to periods previously impacted; check past returns and filings if applicable. |
| **Vehicle Loan Interest Reporting (Sec. 6050AA)** | For loans on vehicles acquired after Dec 31, 2024, recipients (businesses) must report passenger-vehicle loan interest received in trade/business from individuals. Notice 2025-57 gives transitional relief: for 2025, providing a statement suffices and penalties under 6721 & 6722 are waived if statement & reporting rules followed.([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai)) | Applicable for calendar year 2025; stricter reporting applies in 2026. |
| **Tips & Overtime Compensation Reporting** | New deductions enacted for qualified tips and qualified overtime; reporting requirements to show occupations, amounts; penalty relief provided for tax year 2025 if employers/payors comply now.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai)) | Occupation lists published; deduction rules in effect for 2025-2028; reporting compliance in 2025 has relief under new guidance. |
| **Penalty Relief for Remittance Transfer Providers** | For the new excise tax under OBBB, providers get relief from failure-to-deposit penalties for first three quarters of 2026 if reasonable cause standard met.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai)) | Applies to Q1-Q3 2026 deposits; keeps safe harbor under deposit rules in certain situations. |
### Actions You Must Take
- **Update accounting & payroll systems** to generate necessary statements (for car loan interest, tips, overtime). |
- **Review past 2021-2024 Employee Retention Credit (ERC) claims** if filed late—there are limitations on claiming or refunding ERCs for Q3/Q4 2021 claims filed after the Jan 31, 2024 deadline.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))|
- **Educate employees and contractors** in tip-customary occupations about what the occupation list includes; track payments accordingly. |
- **For remittance transfer providers**, ensure new excise tax systems are ready for semimonthly deposits from Jan 2026; document reasonable cause if early misfilings likely.|
### Case Example
A small business uses a third-party settlement organization like PayPal to process goods-and-services payments for multiple employees. Under ARPA, they mistakenly thought any $600 payment triggers a 1099-K filing. Under OBBB, they now know they need to check both **$20,000 aggregate** and **200 transactions** threshold before filing. If they filed unnecessary 1099-Ks in 2023−2024, they might seek corrective measures now.
Staying compliant under OBBB means adjusting systems, training staff, and staying up to date with guidance—but there’s relief for early adopters. Leverage the transitional provisions, get ahead of documentation, and avoid unnecessary penalties.