Compliance
Compliance Spotlight: Adapting to the One, Big, Beautiful Bill’s 2025 Reporting Threshold Changes
Recent legislation reset big reporting thresholds and introduced expanded excise tax reporting obligations—essential for compliance for businesses and individuals alike.
By NomadicTax Research Team • 5-8 min read • November 16, 2025
## What Is the One, Big, Beautiful Bill (OBBB)?
Enacted in **July 2025**, the One, Big, Beautiful Bill introduced numerous tax reforms, including changing various reporting thresholds, creating new excise taxes, and updating information reporting rules. Businesses and taxpayers need to understand these changes to avoid penalties.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
## Key Reporting Threshold Changes
- In **October 2025**, the IRS issued FAQs clarifying that **Form 1099-K’s threshold** has reverted to **$20,000** under the OBBB. Crowdfunding, third-party payments, gig income will now trigger reporting more often.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- Also, **car loan interest** received in a trade or business must be reported under section 6050AA starting 2025. The IRS offered **transitional relief** for lenders, including penalty relief, under Notice 2025-57.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
## New or Updated Excise and Other Reporting Obligations
- The **Passenger Vehicle Loan Interest Reporting** requirement (section 6050AA) mandates businesses to report interest received from individuals, starting in calendar year 2025, with transition relief in effect.([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
- Excise tax increases: the **PCORTF fee** for health insurance policies/self-insured health plans has risen from **$3.47** to **$3.84** per covered life under new adjustments effective for plan years ending between October 1, 2025 and September 30, 2026.([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
## Actionable Steps to Stay Compliant
1. Audit all payment processes—ensure third-party payment processors issue Form 1099-K for transactions over $20,000.
2. Review contracts and interest income from car loans to individuals to make sure if reporting under section 6050AA is required.
3. Update payroll or accounting systems to include new excise tax fees (such as PCORTF) in plans.
4. Train staff and advisors on OBBB changes—both businesses and independent contractors will be affected.
## Consequences of Non-Compliance
- Failure to file required Forms 1099-K or 6050AA can result in **substantial penalties** under section 6721/6722.
- Underreporting interest or missing excise fees can lead to penalties and public reporting liabilities.
## Example Scenario
A rideshare company processed $25,000 in payments in 2025 per driver via a third-party app. Under the reinstated $20,000 threshold for 1099-K, those drivers will receive 1099-K forms. The company must adjust its reporting protocols. Similarly, a car dealership lending to individuals must now track interest income under the new law.
Staying ahead of implementation and using IRS guidance like FAQs and Notices helps mitigate risk and ensures compliance under OBBB.