WASHINGTON, D.C. — The Internal Revenue Service released several key updates last week implementing provisions of the One, Big, Beautiful Bill (OBBB), including temporary reporting relief for auto lenders, new compliance guidance for Employee Retention Credits, and a reinstated $20,000 reporting threshold for Form 1099-K.
On Tuesday, the Treasury Department and IRS issued Notice 2025-57, providing one-year transition relief for lenders required to report car loan interest received in 2025 under the OBBB. The temporary guidance allows lenders to meet reporting obligations by providing borrowers with statements listing the total amount of interest paid, whether through an online portal, monthly billing, or an annual statement.
The rule applies to loans for passenger vehicles — including cars, trucks, SUVs, vans, and motorcycles — weighing less than 14,000 pounds and assembled in the United States. The IRS said it will not impose penalties on lenders who comply with the new reporting standards during the transition period.
The OBBB also creates a new tax deduction for interest paid on qualified car loans for vehicles purchased for personal use beginning after December 31, 2024. The deduction will remain available through 2028.
Separately, on Wednesday, the IRS issued Fact Sheet 2025-07 to clarify enforcement of limits on Employee Retention Credits (ERCs) claimed for the third and fourth quarters of 2021. The new provision, enacted under section 70605(d) of the OBBB, bars the agency from issuing refunds for ERC claims filed after January 31, 2024.
The guidance explains that timely claims will continue to be processed, while late filings after that date will be automatically disallowed. Taxpayers who disagree with disallowed claims will retain the right to appeal through the IRS Independent Office of Appeals.
The IRS stated that taxpayers who rely on the FAQs in good faith will not be subject to penalties that include a reasonable cause standard for relief, such as negligence or other accuracy-related penalties, if that reliance results in an underpayment of tax. The agency added that future updates will be dated to help taxpayers identify when changes are made, and earlier versions will remain available online for reference.
In a third update released Thursday, the IRS announced that the Form 1099-K reporting threshold for third-party payment platforms will revert to the pre-2021 standard of $20,000 and more than 200 transactions per year. The adjustment rolls back a lower threshold introduced under the American Rescue Plan Act, which had prompted concerns from small sellers and gig workers over excessive reporting.
Form 1099-K is used by payment processors to report transactions involving goods or services. The reinstated limit aims to reduce compliance burdens while maintaining oversight of large-scale online transactions.
The IRS said it will continue issuing additional guidance on OBBB implementation in the coming months.
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