Compliance
Compliance Essentials: U.S. Businesses Adapting to OBBBA Changes for Tax Year 2026
Upcoming U.S. inflation adjustments and regulatory changes under the One, Big, Beautiful Bill Act (OBBBA) require businesses to update withholding, reporting, and tax planning by 2026.
By NomadicTax Research Team • 7 min read • November 17, 2025
## Overview of the One, Big, Beautiful Bill Act (OBBBA)
Effective mid-2025, the One, Big, Beautiful Bill Act introduced sweeping reforms to U.S. tax law. These include making permanent the seven individual income tax rates, enhanced child tax credits, and adjusted standard deduction amounts. ([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
## Key Compliance Changes for Businesses
- Businesses offering **Employee Retention Credits (ERC)** need to understand limitations and new compliance rules for claims—especially for the third and fourth quarters of 2021 if filed after January 31, 2024. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- New reporting obligations for **car loan interest** under OBBBA: lenders now have information reporting duties, and certain transitional relief applies for 2025. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- Inflation adjustments for 2026 tax year: standard deduction, tax brackets, adoption credit, child tax credit limits, corporate AMT rules, and expense thresholds under Section 179 will all change. ([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
## Practical Compliance Actions You Should Take Now
1. **Update payroll systems** to reflect new standard deductions, tax tables, and credit rates by tax year 2026.
2. Implement new reporting procedures for lenders regarding car loan interest, especially in anticipation of information disclosure deadlines.
3. Review past ERC filings to confirm they meet new limitations and cutoff dates to avoid disallowed claims.
4. Plan capital investments considering changes in Section 179 expensing limits, which may affect whether to purchase or lease equipment.
## Applying Changes: Example Scenarios
- A mid-sized U.S. manufacturing company planning facility upgrades in late 2025 might accelerate purchases to fall under higher expensing thresholds before cost reductions apply under new limits.
- Lenders must prepare for the new interest reporting requirement by updating contracts and internal systems and informing loan recipients accordingly.
## Risk Mitigation & Audit Preparedness
- Keep documentation of transactions, reporting, and compliance steps. IRS guidance documents and Fact Sheets should be referenced—especially FAQs on 1099-K threshold changes and employee retention credit compliance. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- If operating across state lines or with foreign entities, verify how your business interacts with the Corporate Alternative Minimum Tax (AMT) changes. Notice 2025-46 provides interim guidance. ([irs.gov](https://www.irs.gov/irb/2025-43_IRB?utm_source=openai))
## Final Words for Businesses
OBBBA reshapes the U.S. tax landscape for 2026. Early adaptation—upgrading payroll thresholds, refining reporting obligations, and considering how investments fall under expensing rules—can yield significant benefit and avoid penalties. Stay aligned with IRS notices and revenue procedures to stay compliant and maximize opportunity.