How the One Big Beautiful Bill Act Changes Overtime Reporting for Auto Dealerships in 2026 BY HANNIS T. BOURGEOIS LLP The automotive dealership industry operates with complex employee classifications and varied state-level compliance requirements, making tax compliance both critical and challenging. With the One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025, auto dealerships face significant new reporting requirements that will fundamentally change how they track and report overtime compensation this year. With transitional penalty relief having ended, it is now time for dealerships to adapt their systems for mandatory compliance. The law introduces a federal income tax deduction allowing employees to exclude up to $12,500 of qualified overtime compensation from their taxable income, or $25,000 for joint filers. For auto dealerships with employees who regularly work overtime, this change carries substantial operational implications and unique compliance challenges. 20
RkJQdWJsaXNoZXIy MTg3NDExNQ==