Key Reporting Changes for Entities Under OBBB
If you're a business or other payor, several major changes under the One, Big, Beautiful Bill (OBBB) change how you report transactions and what penalties you may face.
- Car Loan Interest Reporting: Businesses must report new information related to car loan interest. IRS Notice 2025-57 provides transitional guidance for 2025 including penalty relief. (irs.gov)
- Remittance Excise Tax Penalties: Providers of remittance transfers are subject to a new excise tax; IRS Notice 2025-55 gives deposit penalty relief for the first three quarters of 2026 amid these changes. (irs.gov)
- Form 1099-K Threshold: The reporting threshold has reverted to $20,000 & 200 transactions. Entities issuing these forms (payment processors, marketplaces) must comply with the reinstated rule. (irs.gov)
- Transition Year for Tip & Overtime Reporting: Employers/payors won't be penalized in 2025 for lacking occupation-codes or separate statements for tips and overtime; but systems should be in place for full compliance in future years. (irs.gov)
Action Plan for Entity Setup and Compliance
- Audit your reporting systems — ensure W-2, 1099, remittance, and tip/overtime systems can collect occupation data, separate tip/overtime breakdowns, and interface with required codes.
- Update contracts and vendor relationships — providers handling remittances should know about excise tax deposit requirements and whether they’ll be relieved for certain quarters.
- Train accounting/payroll staff — new thresholds mean staff must know when to issue 1099-K, and steps to avoid reporting errors.
- Prepare for updated IRS forms — though not updated yet for 2025, be ready for changes in 2026 documents related to tips/overtime.
Example Cases
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A marketplace platform that used to issue Form 1099-K at $600 now only issues them if thresholds of $20,000 and 200 transactions are met. This reduces administrative burden but requires clear communication to sellers.
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A small car dealership must report interest income on vehicles loaned via in-house financing and follow Notice 2025-57 in 2025; set up systems to track interest payments.
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A remittance service provider must begin calculating new excise taxes but is safe from penalties for certain deposit errors in early 2026 if operating within the relief periods.
Why It Matters for Entity Owners
These changes shift burden and risk: non-compliance can mean fines and lost deductions; proper setup can improve cash flow for employees, reduce withholding or over-reporting costs, and streamline tax preparation. Also, meeting the new detailed reporting requirements builds trust with workers and compliance under audit.