Compliance
Planning for Remittance Transfers: New U.S. Excise Tax Rules You Need to Know
Learn how the new 1% remittance transfer tax under the “One, Big, Beautiful Bill” will affect cross-border fund transfers and what steps both senders and remittance providers should take now.
By NomadicTax Research Team • 5-8 min read • May 9, 2026
## What is the Remittance Transfer Tax?
Under the One, Big, Beautiful Bill (effective January 1, 2026), the U.S. introduced a **new 1% excise tax** on certain remittance transfers sent to foreign recipients. This applies when the sender uses **cash, a money order, cashier’s check, or similar physical instruments** to initiate the transfer. The sender is typically liable for the tax; however, if the remittance provider fails to collect it, the provider becomes responsible. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-on-the-new-remittance-transfer-tax-established-under-the-one-big-beautiful-bill?utm_source=openai))
The U.S. Treasury and IRS issued **proposed regulations on April 10, 2026**, which clarify:
- What counts as a remittance transfer under this rule.
- Which physical instruments trigger the tax.
- What is 포함ed in the base amount.
- Collection, deposit, and reporting requirements. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-on-the-new-remittance-transfer-tax-established-under-the-one-big-beautiful-bill?utm_source=openai))
## Who This Impacts
- **Senders** using physical instruments to send money abroad must plan for the extra 1% cost. If your remittance provider can’t collect it, expect delays or higher fees.
- **Remittance providers** must begin collecting, depositing, and reporting the tax via Form 720 and established procedures.
## Actionable Steps
1. If sending remittances, **choose digital/online methods** where possible—these are not subject to the tax.
2. Remittance providers should:
- Register and ensure forms and records reflect new definitions.
- Collect tax from senders and make required **semimonthly deposits**.
- File quarterly returns with the IRS.
- Prepare for audits or penalties if non-compliance is found.
3. Keep documentation: receipts, instrument type, amount sent—all should clearly show whether this tax was applied.
## Practical Example
Suppose Alice in the U.S. sends \$1,000 to her friend abroad via money order. Under the new rule, she pays an additional **\$10** (1%) – unless her remittance provider takes that on. If the provider doesn’t collect it, they must pay. But if Alice instead uses a bank transfer (not a physical instrument), no excise tax applies.
## Key Dates to Note
- Proposed regulations released **April 10, 2026**, with public comments due by **June 12, 2026**. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-on-the-new-remittance-transfer-tax-established-under-the-one-big-beautiful-bill?utm_source=openai))
- Violations of required collection/reporting may trigger penalties later.
## Bottom Line
This excise tax adds cost and compliance layers to remittance transfers involving physical payment methods. For individuals, shifting to non-taxed digital transfer channels helps. For businesses handling remittance transfers, adopting compliant procedures now is essential. Proper documentation and provider responsibility are critical to avoiding unexpected liabilities.