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How New Business Tax Accounts & Tip Rules Change the Game for Small Employers
New IRS final and proposed regulations under OBBB reshape how small-businesses handle tipped employees, business tax accounts, and the remittance transfer tax: what you need to know.
By NomadicTax Research Team • 5-8 min read • April 24, 2026
## What’s New Under the One, Big, Beautiful Bill (OBBB)
In April 2026, several important IRS announcements changed how small businesses—especially those with tipped staff or that deal in remittances—will handle taxation and compliance. Key developments include:
- **Final regulations** defining occupations regular in receiving tips and what counts under the “No Tax on Tips” provision. ([irs.gov](https://www.irs.gov/newsroom?utm_source=openai))
- **Proposed regulations** covering the new **remittance transfer tax**, a 1% excise tax on remittance transfers after December 31, 2025. Businesses and money transfer operators in particular will need to understand these rules. ([irs.gov](https://www.irs.gov/newsroom/tax-tips-for-march-2026?utm_source=openai))
## No Tax on Tips: What Employers Need to Know
### Occupations Covered
Employers must now refer to the final regulations to see which professions automatically qualify for tip tax exemptions. Examples include restaurants, bars, salons, and other service sectors where **tips are customary and regular**. ([irs.gov](https://www.irs.gov/newsroom?utm_source=openai))
### Employer Responsibilities
- With updated rules, employers must **report wages and tips** accurately on Form W-2s.
- Where tips are exempt under OBBB, ensure payroll systems properly record tipped income categories.
- Train payroll and HR staff in the new classifications to avoid misreporting.
## Remittance Transfer Tax: Brief Overview
- A new **1% excise tax** applies to remittance transfers made after **December 31, 2025**. ([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
- Businesses facilitating remittance transfers (e.g., money transfer services, some financial institutions) will need to calculate the tax, potentially collect it, and remit appropriately.
- Proposed regulations under development will define what qualifies as a “remittance transfer,” which providers are covered, and how to keep required records. ([irs.gov](https://www.irs.gov/newsroom?utm_source=openai))
## Action Plan for Small Businesses
1. **Audit tip income practices.** Review sectors of your business that distribute or rely on tips. Confirm whether they fall under “customary and regular” criteria. Adjust policies and payroll coding accordingly.
2. **Watch your remittance processes.** If you send, receive or facilitate remittance transfers, review your volume, channels, and rates now—especially since a 1% excise tax could change pricing or margins.
3. **Update accounting systems.** Ensure your bookkeeping and tax software can handle these changes—new tax categories, possible deductions, and form requirements.
4. **Plan cash flow.** For businesses that will now incur this excise tax, build the additional cost into projections. Don’t wait until you receive full regulations—anticipate compliance burdens.
## Practical Example
Imagine you run a restaurant. Previously, all tip income counted fully into taxable wages. With “No Tax on Tips” rules in final form, certain tip income might now be **excluded** from wage taxes if the occupation and tipping pattern qualify. Changes in payroll reporting could reduce taxable payroll costs.
For a remittance business, a 1% excise tax on money transfers may cut into profit margins if the business had not budgeted for tax collection or remittance sets.
## Bottom Line
The OBBB's new rules reshape how businesses deal with tips and remittances—potentially saving tax, but also introducing new compliance obligations. Stay ahead by understanding your obligations, updating systems, and consulting professionals if in doubt.