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A new 1% federal excise tax hits money sent abroad from the US starting January 1, 2026— but only on cash-funded transfers. See what you'd owe, how to pay $0, and the cheapest way to send after tax.
Remittance transfer tax (1%)
$10.00
On $1,000.00, you'd pay $10.00 in federal excise tax — that's $120.00/year if you send this monthly.
💡 Pay $0 tax
Fund the same transfer from your bank account or with a US-issued debit/credit card and this transfer is exempt from the tax entirely.
Estimate only, not tax advice. The tax is 1% of the amount sent on cash-funded transfers. Confirm the exact charge with your provider at checkout.
Whether or not the 1% applies, the exchange-rate markup usually costs more than the tax. Here are the best-value providers on USD → India right now — pick another corridor to compare yours.
The One Big Beautiful Bill Act, signed into law on July 4, 2025, created a 1% excise tax on remittance transfers sent from the United States to recipients abroad. It applies to transfers made after December 31, 2025. The sender is liable, but the remittance transfer provider collects the tax at checkout and remits it to the IRS.
In plain terms: if you pay from your bank account or a US card, you owe nothing. The tax is aimed squarely at cash-funded transfers.
The remittance transfer tax is 1% of the amount sent. It applies to transfers made after December 31, 2025 (i.e. from January 1, 2026) that are funded with cash, a money order, a cashier's check, or a similar physical instrument. On a $1,000 transfer that's $10.
Transfers funded from an account held at a US financial institution, and transfers funded with a debit or credit card issued in the US, are exempt. In practice, if you pay from your bank account or a US-issued card, you owe $0 remittance tax — the 1% only bites cash-funded transfers.
The sender is legally liable for the tax, but the remittance transfer provider collects it at the point of sale, makes semi-monthly deposits, and files quarterly returns with the IRS on Form 720. You'll see it added at checkout on a taxable transfer.
The statute and proposed regulations set the tax at 1% of the transfer amount with no published de-minimis threshold, so it can apply to small cash-funded transfers too. Always confirm the exact amount with your provider before sending.
Fund your transfer from a US bank account or with a US-issued debit/credit card instead of cash — those funding methods are exempt. After that, the biggest remaining cost is the provider's exchange-rate markup, so compare providers on the after-tax, all-in cost.
Sources & last updated
Based on the One Big Beautiful Bill Act and IRS/Treasury guidance. Primary sources: IRS proposed regulations and the Federal Register rule. This tool is for information only and is not tax advice. Reviewed July 2026.
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