(Personally I think the tax should be higher … MUCH higher if you are not a US citizen.)
Beginning January 1, 2026, a 1% federal tax applies to cash-based international transfers from the U.S., impacting all senders. Banks must collect and report the tax to the IRS. * Green card holders can apply for refundable credits. ** Electronic transfers via bank or card remain exempt from this tax.
* What good does it do to charge an excise tax and then refund the tax, especially for people who are NOT citizens? ** WHY?
Key Takeaways
• Starting January 1, 2026, a 1% federal remittance tax applies to cash-based international transfers within the U.S.
• Financial institutions must collect the tax, report sender details quarterly to the IRS, and face penalties if noncompliant.
• The tax affects all individuals, citizens and non-citizens; green card holders may claim refundable credits on taxes.
A new federal law in the United States will soon change how many people send money overseas. Starting January 1, 2026, a remittance tax will apply to cash-based international money transfers sent from within the U.S. This policy, part of the “One Big Beautiful Bill Act” (OBBBA) signed by President Trump on July 4, 2025, introduces a 1% excise tax collected by financial institutions at the point of transfer. This update marks a clear shift from past rules and affects millions of U.S. residents, citizens and non-citizens alike, who regularly send personal funds to family and friends abroad.
(The chart below is the most recent chart, 2016, I could find that shows the amount of remittances.)
https://www.visaverge.com/visa/effective-date-and-transition-rules-for-remittance-tax-in-one-big-beautiful-bill/
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