New 1% US tax hits cash transfers sent by nomads and expats

How the remittance tax works

The U.S. has a 1% excise tax on certain cash-funded remittance transfers sent abroad and it has applied to transfers made after Dec. 31, 2025. The tax came in under Section 4475 of the Internal Revenue Code, enacted in the One Big Beautiful Bill Act signed July 4, 2025.

The charge applies when senders hand over cash, a money order, a cashier’s check or a similar physical instrument to providers such as Western Union or MoneyGram. It does not apply to bank wires, ACH transfers, debit or credit card payments or app transfers funded from a U.S. bank account.

Who gets hit

The tax covers U.S. citizens, residents, green card holders, visa holders and nonresident aliens sending money from the U.S. with cash-funded methods. That includes immigrants supporting family abroad, plus expats, digital nomads and travelers who still rely on physical payment methods.

Providers collect the tax at the time of transfer and send it to the IRS. The sender remains liable for the tax, though providers can face secondary liability if they fail to collect it.

What to do next

The cleanest way to avoid the tax is to switch to electronic transfers funded from a bank account. Those transfers are exempt, even when the recipient is overseas.

The IRS published proposed regulations on April 10, 2026, with comments due June 12, 2026. For now, the tax is already in force and providers are operating under filing and deposit rules tied to Form 720. Check our visa updates and country guides for destination-specific details.