Compliance
Returns, Forms, and Relief: Compliance Tips Under OBBB's Form 1099-K & Car Loan Reporting
With the OBBB changing the Form 1099-K threshold back and introducing new car-loan interest reporting rules, staying compliant means close attention to transaction counts and details.
By NomadicTax Research Team • 5-8 min read • November 21, 2025
## What’s New: Key Compliance Updates
Two significant compliance changes under the *One, Big, Beautiful Bill* you should know:
- **Form 1099-K threshold restored**: Reporting now applies only when third-party settlement organizations pay a participant more than **$20,000** *and* process **over 200 transactions** a year.([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))
- **Car loan interest reporting (Section 6050AA)**: Lenders must report interest received from “specified passenger vehicle loans” in 2025. Some transitional relief is available—if you provide certain statements instead of full annual filings. Penalties are suspended for 2025 under those conditions.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
## Who Is Affected?
- **Online marketplace sellers / gig economy workers**: If you receive payments through platforms, you may receive a 1099-K if the $20,000 / 200 transaction thresholds are met. Particularly relevant for high-volume sellers.|
- **Payment service providers & fintechs**: Need updated systems to monitor transactions and issue correct 1099-Ks.|
- **Auto lenders & finance companies**: Must track certain vehicle loans and issue information returns or qualifying statement relief under new rules.|
## Action Steps for Ensuring Compliance
1. **Count transactions separately**: Even if total payments exceed $20,000, the number of transactions must also pass the 200-transaction test for 1099-K reporting. Ensure platforms and payment processors help you track both metrics.
2. **Review platforms’ policies**: Some platforms may issue 1099-Ks even if not required. Get ahead of surprise income statements by keeping clear records.
3. **For lenders**: If you’re issuing passenger vehicle loans, check if they qualify, and use the statement relief option for 2025 by giving customers a record of interest received on specified loans. Apply for relief from penalties in 2025 if following IRS guidance.([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
4. **Document everything**: Retain transaction histories, statements to borrowers or payees, and internal policies. These records are critical if the IRS reviews submissions.
## Examples: Applying the Rules
| Case | Situation | Requirement |
|---|---|---|
| Jane sells art online, receives $25,000 in 150 sales/events through marketplaces | Over $20k but under 200 transactions | **No** 1099-K required (thresholds both must be met) |
| John sells handcrafted goods through 250 transactions totaling $22,000 | Both exceeded | **1099-K required** |
| Auto lender has interest from $300,000 in specified vehicle loans | 2025 statement relief available if customers get qualifying statements | File and avoid penalties under Notice 2025-57 if statements provided.([irs.gov](https://www.irs.gov/irb/2025-45_IRB?utm_source=openai))
## Consequences of Non-Compliance
Failure to comply with either rule can lead to penalties—particularly substantial with 1099-K or information return misfilings. IRS usually grants grace in transitional years (like 2025 for some lenders), but that relief is temporary.
## Conclusion: Stay Ahead of the Curve
These compliance updates introduce new reporting requirements but also restore thresholds that benefit many taxpayers. Whether you’re an individual creator, marketplace operator, or financial institution, take time to audit your processes now so you’re ready for reports and forms filing early. Keeping accurate records, tracking thresholds, and using relief options judiciously will save headaches and penalties later.
**Sources**: IRS News Releases IR-2025-107 & IR-2025-105; Notice 2025-57.([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))