Compliance
Compliance Spotlight: Preparing for Remittance Transfer Tax Under the One, Big, Beautiful Bill
Starting in 2026, providers of remittance transfers face new excise tax collection and reporting obligations. Here’s what businesses must do now to stay compliant.
By NomadicTax Research Team • 5-8 min read • November 21, 2025
## What’s Changing: Remittance Transfer Tax Introduction
Under the *One, Big, Beautiful Bill Act*, beginning **January 1, 2026**, certain remittance transfer providers must collect a **1% remittance transfer tax** on certain sender transactions involving physical cash, money orders, cashier’s checks, or similar instruments. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-penalty-relief-for-remittance-transfer-providers-who-fail-to-deposit-excise-tax-under-the-one-big-beautiful-bill?utm_source=openai)) These changes include:
- Semimonthly deposit requirements.
- Quarterly excise tax returns filed using Form 720.
- Providers who pay all tax due by return deadlines and make timely but potentially incorrect deposits during the first three quarters get **penalty relief** for deposit errors under Notice 2025-55. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-penalty-relief-for-remittance-transfer-providers-who-fail-to-deposit-excise-tax-under-the-one-big-beautiful-bill?utm_source=openai))
## Who Muss Comply
- Businesses that send remittance transfers to individuals using **cash, cashier’s checks, money orders, or similar physical instruments**. Digital transfers or bank wires may be excluded.
- These providers must also satisfy **timely deposit requirements** per the excise tax rules.
## Key Deadlines & Requirements
- **Effective date**: January 1, 2026. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-penalty-relief-for-remittance-transfer-providers-who-fail-to-deposit-excise-tax-under-the-one-big-beautiful-bill?utm_source=openai))
- **First semimonthly deposit**: Due January 29, 2026, for transfers in first half of January. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-penalty-relief-for-remittance-transfer-providers-who-fail-to-deposit-excise-tax-under-the-one-big-beautiful-bill?utm_source=openai))
- **Quarterly returns**: Must file quarterly Form 720 returns reporting remittance transfer tax evidently starting with first quarter 2026.
- **Penalty relief window**: First three quarters of 2026—providers avoid deposit penalties if they make timely deposits (even if incorrect), eventually pay full underpayment by the return due date. Reasonable cause standard applies. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-penalty-relief-for-remittance-transfer-providers-who-fail-to-deposit-excise-tax-under-the-one-big-beautiful-bill?utm_source=openai))
## Example of Compliance Path
XYZ Remittance Inc. collects $100,000 in covered sender remittances in Jan 2026, of which 80% via eligible instruments (cash, etc.). They must:
- Collect **$800** (1% of $80,000) remittance transfer tax.
- Deposit semimonthly by Jan 29, 2026 (for first half of January).
- File Form 720 for Q1 2026 (by late April, depending on Form 720 schedule).
- If their deposit math was off but they paid and made timely deposit, they qualify for relief in first three quarters. After that, normal penalties apply.
## Action Items for Providers
- **Adjust payment and checkout systems** to identify covered transactions (e.g. distinguish cash orders, money orders, cashier’s checks).
- **Implement tracking for deposit deadlines**, ensuring semimonthly deposits begin Jan 29, 2026.
- **Start recordkeeping now**: document instrument types, senders, amounts to meet deposit and return preparation.
- **Consult a tax professional**—especially for providers with mixed transaction types to determine what qualifies.
## Risks of Non-Compliance
- Failure to compute or remit the tax on time will incur penalties after the relief period.
- Incorrect classification of transactions may lead to undercollections.
- Deposit schedule failures lead to penalty and interest exposure.
In short, remittance transfer providers should begin planning now—building systems, educating staff, and preparing for the start date so they hit the ground running on January 1, 2026.