Implications of the Remittance Tax in the GOP Reconciliation Bill

Provisions aimed at generating revenue in both the House and Senate versions of the One Big Beautiful Bill Act (OBBBA) propose a new excise tax on international remittance transfers. While this provision is in both versions, there are some key differences in how each chamber is approaching the implementation and scope of the tax.

Why Introduce a Remittance Excise Tax?

The remittance tax is expected to generate a substantial amount of revenue for the federal government. For example, in 2023, over $23 billion was sent to from the United States to India alone. The Joint Committee of Taxation estimates the House version would generate just shy of $23 billion over the ten-year reconciliation period. The Senate version is estimated to raise around $10 billion over the same period.  

Who Does it Impact?

Potentially, everyone. Under the House version, any individual who is transferring funds out of the United States could be subject to the excise tax, including citizens, green card holders, visa holders, and non-resident aliens. While the Senate version limits the types of remittances taxed and reduces the rate to 1%, it could still impact millions of taxpayers.

House Version of the Remittance Tax

Under the House version of the bill, a “remittance transfer” would apply to any electronic movement of funds initiated by a “natural person” located in the U.S. to any recipient in a foreign country, unless they are considered a U.S. citizen or national. (Entities are not included in this definition.) A U.S. national is an individual who is not a U.S. citizen but owes allegiance to the U.S. For example, U.S. nationals include American Samoans and Northern Mariana Islanders who decide to not become U.S. citizens.  

Any electronic transfer is included in the House definition of a remittance, including but not limited to, wire transfers, international ACH payments, prepaid card reloads, online bill pay by bank transfer, and similar services provided by banks or specialized firms. There is a $15 transaction threshold for the tax to be imposed. There are no exceptions for special circumstances such as education expenses, medical expenses, or similar costs that are deductible from income in the United States.

The House bill requires that remittance transfer providers file returns with the Secretary to disclose transfer information, including sender identification information and amounts. A fund transfer service may become a “qualified remittance transfer provider” (QRTP) by signing an agreement with the Treasury to verify customer status, withhold upon all nonexempt transfers, and report all transfers regardless of taxation.

The House bill does not address whether a transfer to the individual’s own foreign account, or a transfer to a closely or wholly owned entity such as a trust or foreign corporation, would be exempt. However, under the Senate version, a non-U.S. citizen who sends money to a foreign account they own would still be subject to the remittance tax. The House also left open the possibility of the excise tax including digital asset transfers such as cryptocurrency or stablecoins.

Key Changes in the Senate Version

The Senate version of the remittance tax provision in the OBBBA has some important differences from the House bill.  The Senate bill reduces the rate from the 5% proposed by the House to just 1% of remittance transfers. The proposed changes also include language limiting the applicability of the excise tax to just cash transfers or their equivalents, instead of all electronic transfers. This limitation removes any uncertainty as to the applicability to cryptocurrency or stablecoin transfers – under the Senate version, they are specifically not remittance transfers.

The Senate also excluded from the remittance tax any transfers funded by a debit or credit card issued in the United States, but did retain prepaid card reloads and transfers made from such cards as taxable remittances.

Is There Any Relief?

The House version of the bill provides relief to “U.S. citizens and nationals” if the transfer is made by such individuals through a qualified remittance transfer provider, as discussed above.  Additionally, U.S. citizens and nationals sending funds through a QRTP will either have the tax waived upon transfer or refunded later via a refundable federal tax credit. However, green card holders and visa holders are deliberately excluded from relief provided in the House version. They will be required to pay the full remittance tax regardless of their employment, tax or immigration status in the U.S.

The Senate bill also provides an exception for certain remittance transfers, but did not adopt the House exception for U.S. citizens and nationals. Instead, the exception is tied to the Bank Secrecy Act (BSA). Under the Senate version, the remittance tax would not apply to any transfer where the funds are withdrawn from an account held at a financial institution that is subject to BSA reporting. Additionally, as discussed above, the Senate excluded transfers funded by a debit or credit card issued in the United States.

However, the Senate did not include any provisions for refundability or credit for U.S. citizens, nationals, or any other category of transferor, if the remittance tax is imposed. As currently written, the Senate version either excludes certain transfers from withholding entirely due to their funding source, or the transfer is fully taxable. The Senate bill also imposes a secondary liability on the institution servicing the fund transfer. If appropriate withholding is not done upon transfer, the service provider is then liable for the tax.

Potential Issues Facing Taxpayers

The excise tax has potential drawbacks, including concerns about the interaction between the excise tax and treaties (as treaties only apply to income or estate tax), the effect on students and highly talented individuals under specialized visas, the impact on immigration, and the cost to United States residents who operate businesses overseas.

What’s Next?

The OBBBA is still working its way through Congress. The Senate version passed on July 1, 2025, on a 51-50 vote. The bill is now awaiting a vote in the House, which may come as early as July 2, 2025. Congress is hoping to pass the bill by July 4, 2025. We are monitoring the progress of the bill and will continue to provide updates as these provisions evolve.

Concerned about the impact of this tax on yourself or your business? Reach out to your EisnerAmper tax advisor to discuss the effect and potential planning or amelioration.