The legal landscape in the U.S. is shifting faster than ever. In 2025 and 2026, over 4,800 new regulations have been introduced across federal and state levels - the highest number in a two-year span since records began. This isn’t just about new rules. It’s about how those rules change your life, your business, and your rights. From how much you pay in taxes to whether you can carry a gun in a national park, the changes are real, immediate, and often confusing.
What’s Changing in Taxes and Income Reporting?
The One, Big, Beautiful Bill, signed into law on July 4, 2025, brought the biggest tax overhaul in a decade. The most noticeable change? A new $6,000 deduction for individuals aged 65 and older. This applies to tax years 2025 through 2028, and it’s automatic - no extra forms needed if you’re already filing a 1040.
But the IRS also rolled back a controversial change. Starting in 2025, the threshold for receiving a Form 1099-K - the form that reports payments from apps like PayPal, Venmo, or Etsy - went back to $20,000 in gross payments and 200 transactions. That means millions of side-hustlers won’t get a tax form unless they’re making serious money. The IRS confirmed this in Notice IR-2025-107, issued October 23, 2025.
At the same time, the Employee Retention Credit (ERC) rules were tightened. Businesses that claimed ERC during the pandemic now face stricter audits. The IRS released FS-2025-07 to clarify who qualifies and who doesn’t. If you got ERC money between 2020 and 2021, double-check your paperwork. The agency is already flagging improper claims.
Labor Laws: California Leads the Charge
California didn’t wait for federal action. In 2025, the state passed two major labor laws that ripple across the country. Assembly Bill 406, effective October 1, 2025, merged three separate leave laws into one: victims’ leave, paid sick leave, and family care leave. Now, employees can take time off to deal with domestic violence, stalking, or sexual assault - and employers must provide notice of this right in writing.
Employers are spending between $1,200 and $1,800 per employee to train staff on these changes. The Civil Rights Department (CRD) released a new model notice that must be posted in workplaces by January 2026. If you’re a manager in California, you’re legally required to know what’s in it.
Senate Bill 642 also changed pay transparency rules. Companies with 15 or more employees must now include salary ranges in all job postings - even remote ones - if the job could be performed in California. This applies whether the worker lives in L.A. or London. Violations can cost up to $10,000 per posting.
Housing and Development: California Breaks the Mold
California’s housing crisis got a major policy shift. Assembly Bill 130 and Senate Bill 131, passed as part of the 2025-2026 state budget, created sweeping exemptions to the California Environmental Quality Act (CEQA). For the first time, certain housing and infrastructure projects no longer need full environmental reviews if they meet affordability and density standards.
The California Building Industry Association estimates this will cut approval times by 18 to 24 months. That’s huge. Projects that used to take five years to get through red tape could now be built in under three. But there’s a catch: only projects that include 10% or more affordable units qualify. Developers are scrambling to adjust their models.
Local governments are also required to streamline permitting. If your city hasn’t updated its online portal by June 2026, it risks losing state funding. This isn’t just about construction - it’s about who gets to live where.
Firearms and Law Enforcement: National Rights Expanded
The LEOSA Reform Act of 2025, passed by the House in May and pending Senate action, would let active and retired law enforcement officers carry concealed firearms in places they were previously banned from: school zones, national parks, state parks, and even some federal buildings. The bill also allows states to reduce how often retired officers must re-qualify with their firearms - from annually to every three years.
This isn’t about arming more people. It’s about recognizing that trained officers - even retired ones - shouldn’t be treated like ordinary citizens when it comes to self-defense. The National Rifle Association and major police unions support it. Civil liberties groups are concerned, but the bill’s language includes strict definitions of who qualifies. Only those with 15+ years of service and a clean record are covered.
Supreme Court and Constitutional Shifts
The Roberts Court turns 20 in 2025, and its next term could reshape American law for decades. Legal analysts from American Progress warn that the Court is preparing to expand presidential power and limit individual rights under the Constitution. Cases on executive privilege, voting rights, and agency authority are already on the docket.
One case, United States v. State Regulatory Commission, could decide whether federal agencies like the EPA or SEC can write their own rules without explicit approval from Congress. If the Court sides with the federal government, agencies will gain more power. If it sides with the states, hundreds of regulations could be thrown out overnight.
Legal departments at Fortune 500 companies have already increased their constitutional law expertise by 25%. Many hired outside counsel or trained in-house teams to prepare for the fallout.
Healthcare and Insurance: Federal Deregulation, State Pushback
At the federal level, Medicare Advantage plans are seeing fewer oversight rules. Premium caps are being lifted. Mergers between insurers are moving faster. The Department of Health and Human Services says this will increase competition. Critics say it will lead to higher out-of-pocket costs for seniors.
Meanwhile, states are stepping in. California, New York, and Illinois have passed laws requiring Medicare Advantage plans to cover more mental health services and limit prior authorization delays. If you’re on Medicare, your benefits might look different depending on where you live.
Insurance compliance requirements jumped 22% in the first half of 2025 alone, according to RegEd. Companies operating in multiple states now need separate compliance teams for each jurisdiction. One insurer in Texas reported spending $3.2 million more in 2025 just to track state-level changes.
What This Means for Businesses and Individuals
If you run a business, compliance isn’t optional anymore. It’s a full-time job. Companies are hiring more compliance officers. Some are spending 15-20% more on legal staff. Others are turning to RegTech - regulatory technology tools that use AI to track law changes in real time. Deloitte found that 78% of Fortune 500 companies plan to use AI-driven compliance software by 2026.
For individuals, the changes are less obvious but just as important. If you’re over 65, you’ll get a bigger tax break. If you’re a renter in California, housing may become more affordable - but only if you qualify for subsidized units. If you’re a veteran or retired officer, your right to carry may expand. If you’re a gig worker, you’re less likely to get a 1099-K unless you’re earning serious income.
The biggest takeaway? The federal government and the states are pulling in opposite directions. What’s legal in one state might be illegal in the next. What’s allowed today might be banned next year. There’s no single source to check. You have to monitor multiple agencies, track legislative sessions, and stay alert.
How to Stay Ahead
- For employers: Update your employee handbooks by March 2026. Include new leave policies, pay transparency rules, and notice requirements.
- For freelancers and gig workers: Keep detailed records of income. Even if you don’t get a 1099-K, you still owe taxes.
- For homeowners: If you’re planning a renovation or new build in California, check if your project qualifies for CEQA exemptions.
- For retirees: Review your tax strategy. The $6,000 deduction could lower your taxable income significantly.
- For anyone: Sign up for alerts from your state’s attorney general office. Many offer free email updates on new laws.
Change is inevitable. But you don’t have to be caught off guard. The laws are public. The deadlines are posted. The tools exist. The question is: are you looking?
What are the most important legal changes coming in 2026?
The biggest changes in 2026 will be the full rollout of California’s AB 406 leave law, the IRS’s tax inflation adjustments for 2026 under the One, Big, Beautiful Bill, and potential Supreme Court rulings that could redefine federal agency power. States will also likely pass more labor and housing laws as federal oversight relaxes.
Do these laws apply to remote workers outside California?
Yes - if the job is based in California or the employer is headquartered there. California’s pay transparency law (SB 642) and leave laws apply to any employee who works remotely for a California-based company, even if they live in another state. The rule is based on the employer’s location, not the employee’s.
How will the LEOSA Reform Act affect me if I’m not a law enforcement officer?
It won’t directly affect you. But it may change how safe public spaces feel. If you live near a national park or school, you may notice more people carrying concealed firearms. The law doesn’t change anything for civilians - only for qualified active and retired officers.
Is the $6,000 tax deduction automatic?
Yes. If you’re 65 or older and file a federal tax return, the IRS will apply the deduction automatically when processing your return. You don’t need to file extra forms. But make sure your birth date is correct on your tax records.
What should small businesses do to prepare?
Start by reviewing your state’s labor and tax laws. Then update your payroll system, employee handbooks, and notice postings. Consider using a RegTech tool like ComplyRight or LexisNexis Regulatory Intelligence. These platforms track changes in real time and send alerts. The cost is often less than one legal fine.
Are there any penalties for not complying with these new laws?
Yes. California fines employers up to $10,000 per pay transparency violation. The IRS can assess penalties for incorrect 1099 filings or improper ERC claims. Federal agencies can shut down non-compliant healthcare providers. Ignorance is not a defense - and audits are increasing.
Alexandra Enns
January 23, 2026 AT 20:19This 'One, Big, Beautiful Bill' is a joke wrapped in a tax form. $6,000 deduction for seniors? That’s pocket change when rent’s $3K and insulin’s $500. Meanwhile, the IRS is still auditing gig workers like they’re tax evaders while letting corporations dodge billions. California’s laws are the only thing keeping this country from collapsing into a corporate dystopia. And don’t even get me started on LEOSA - we’re arming retired cops like they’re Navy SEALs now? What’s next, veterans carrying nukes in Walmart?
Marie-Pier D.
January 25, 2026 AT 04:58Okay but can we just pause for a second to appreciate how much CA is doing right? 😭 I’m a single mom in Vancouver and my sister works remotely for a San Francisco startup - she just got paid 20% more because of SB 642. And the leave law? My cousin used it after her assault last year. No one talked about it. No stigma. Just… support. This isn’t ‘woke politics,’ it’s basic human decency. 🙏
Also, the $6k tax break? My abuela cried when she found out. She’s 72 and still cleaning houses. She deserves every penny.
Luke Davidson
January 26, 2026 AT 11:00Man I love how messy this all is - in the best way. Like the IRS going back to $20k for 1099-K? That’s a win for the guy selling handmade candles on Etsy while raising three kids. And CEQA exemptions? I used to work in construction - five years to get a permit? That’s a crime. If you’re building affordable housing, cut the red tape. Let people live.
But I gotta say… the Supreme Court stuff? That’s the real ticking bomb. If they gut agency power, we’re looking at a world where the EPA can’t clean a river unless Congress votes on it. Like… what year is this? 1820?
Amelia Williams
January 26, 2026 AT 12:41Just got my first 1099-K in 2025 after hitting $22k on Fiverr - thank god they rolled it back! I was sweating bullets thinking I’d owe $5k in taxes for my side hustle. And the $6k deduction? That’s gonna cover my dog’s vet bills for the year. Honestly, I didn’t think the government could do something this simple and actually helpful. Kudos to whoever pushed that through.
Also, if you’re a remote worker outside CA but your boss is in CA? Yeah, you’re covered. I live in Texas but my company’s HQ is in Oakland. They sent me a 10-page HR update. I printed it. I framed it. It’s on my wall now. Legal compliance as art.
Darren Links
January 26, 2026 AT 19:00Let me just say this - if you think California’s laws are overreach, you’re not paying attention. They’re not trying to control you. They’re trying to protect people who’ve been ignored for decades. The pay transparency law? It’s not about making employers nervous - it’s about ending the gender pay gap that’s been hiding behind ‘negotiation.’ The leave law? It’s not about ‘special treatment’ - it’s about letting survivors breathe.
And the fact that you’re still arguing about this means you’ve never had to choose between rent and a restraining order. Just saying.
Jamie Hooper
January 26, 2026 AT 23:55so like… the leosa thing? i mean… i get it. cops should be able to carry. but like… what if a retired cop has a mental breakdown? or gets divorced and goes off the rails? and now he’s got a glock in the school zone? like… we’re trusting people who might’ve been fired for misconduct? this feels like a loophole with a bullet
also who the hell wrote 'one big beautiful bill' like this is a romcom
Kevin Waters
January 27, 2026 AT 05:46Just wanted to add a quick note for small biz owners: the RegTech tools aren’t just nice to have - they’re survival gear. I used to pay $12k/year in legal fees just to stay compliant across 3 states. Now I use ComplyRight - $299/month. It flags changes before they hit my inbox. Saved my business last year when NY changed their sick leave rules overnight.
Also, if you’re a freelancer - keep your receipts. Even if you don’t get a 1099, the IRS knows. I learned that the hard way. Don’t be me.