Annual Remittance Tax Cost Difference for Single vs Dual-Income H-1B Households Under OBBBA

Key Takeaways

• Starting December 31, 2025, the One Big Beautiful Bill Act imposes a 1% excise tax on international remittances.
• H-1B visa holders sending money abroad will pay 1% tax unless exempt as U.S. citizens or nationals.
• Dual-income H-1B households may pay double the remittance excise tax compared to single-income families.

As of July 5, 2025, a major change is coming for many international workers in the United States 🇺🇸, especially those on H-1B visas. The One Big Beautiful Bill Act (OBBBA) introduces a new 1% excise tax on remittance transfers—money sent from the United States 🇺🇸 to other countries. This tax, set to take effect after December 31, 2025, will directly affect the finances of thousands of immigrant families who regularly send money to support loved ones abroad. The impact will be especially noticeable for H-1B households, where the number of earners in a family can make a big difference in the total annual tax paid.

Let’s break down what this means, how it works, and why it matters for single– and dual-income H-1B households.

What Is the One Big Beautiful Bill Act’s Remittance Excise Tax?

The One Big Beautiful Bill Act is a wide-ranging piece of legislation that aims to raise government revenue and change several aspects of tax and immigration policy. One of its most talked-about features is the 1% excise tax on remittance transfers. An excise tax is a special tax charged on certain goods or transactions—in this case, on money sent from the United States 🇺🇸 to people in other countries.

Key facts about the remittance excise tax:

• Tax Rate: 1% of the amount sent abroad (remittance transfer)
• Effective Date: Applies to transfers made after December 31, 2025
• Who Pays: Nonresidents, including H-1B visa holders, unless they can prove they are U.S. citizens or nationals
• How It’s Collected: Through remittance providers (like banks, money transfer companies), who must check citizenship status and collect the tax if required
• Exceptions: Verified U.S. citizens and certain transfers using approved providers may be exempt

Earlier versions of the bill suggested a higher 3.5% tax, but lawmakers settled on 1% after debate and feedback from various groups.

Why Does This Tax Matter for H-1B Households?

H-1B visa holders are skilled workers from other countries who come to the United States 🇺🇸 for jobs, often in technology, healthcare, or engineering. Many H-1B workers send part of their earnings back home to help family members with living expenses, education, or medical costs. This practice is called sending a remittance.

The new excise tax means that every time an H-1B worker sends money abroad, 1% of the amount will be taken as tax—unless they are exempt. For families with more than one earner, the total amount sent (and taxed) can be much higher.

How Much Will H-1B Households Pay? Single vs. Dual-Income Scenarios

The One Big Beautiful Bill Act does not set different tax rates for different types of households. Instead, the annual cost difference comes from how much money is sent abroad. In most cases, a dual-income household (where both spouses work) will send more money than a single-income household (where only one person works). This means dual-income families will pay more in remittance excise taxes.

Let’s look at a simple example:

• Single-Income H-1B Household:
  • One earner sends $20,000 abroad each year
  • Annual tax: 1% of $20,000 = $200
• Dual-Income H-1B Household:
  • Two earners, each sending $20,000 (total $40,000)
  • Annual tax: 1% of $40,000 = $400

Annual cost difference:
Dual-income household pays $400 – $200 = $200 more per year in remittance excise tax.

This example uses round numbers, but the pattern holds true: the more a household sends, the more tax they pay. Dual-income families, who often send more money, will see their tax bill double compared to single-income families if both earners send similar amounts.

Who Is Affected by the Remittance Excise Tax?

The tax mainly targets nonresidents—people living in the United States 🇺🇸 who are not citizens or permanent residents. This includes:

• H-1B visa holders: Skilled workers from other countries
• Other temporary visa holders: Such as students or seasonal workers
• Undocumented immigrants: If they use formal remittance services

Exceptions:
– U.S. citizens and nationals are exempt if they can prove their status
– Some remittance providers may have agreements with the U.S. Treasury to verify citizenship and avoid charging the tax

If you are an H-1B worker, you will likely be subject to the tax unless you become a permanent resident (green card holder) or citizen.

Why Was the Remittance Tax Introduced?

Lawmakers included the remittance excise tax in the One Big Beautiful Bill Act to raise money for the government. Supporters argue that people who earn money in the United States 🇺🇸 and send it abroad should help pay for public services. They also say the tax could encourage more people to become citizens or permanent residents, who are exempt.

However, critics—including many immigrant advocacy groups and tax experts—say the tax is unfair. They argue it:

• Disproportionately affects immigrants: Many immigrants send money home to support family, so the tax hits them hardest
• Raises compliance costs: Remittance providers must check citizenship status, adding paperwork and costs
• May not raise as much money as hoped: Some people may switch to informal ways of sending money to avoid the tax

As reported by VisaVerge.com, the tax has been called “nonneutral” because it does not treat all taxpayers the same and may discourage families from splitting their income between the United States 🇺🇸 and their home countries.

What Are the Practical Implications for H-1B Families?

1. Increased Financial Burden

For many H-1B households, especially those with two earners, the new tax means less money reaches family members abroad. Over time, this can add up to hundreds or even thousands of dollars lost to taxes each year.

2. Possible Changes in Remittance Behavior

Some families may:

• Send less money: To reduce the tax paid
• Consolidate transfers: Sending larger amounts less often to minimize fees and paperwork
• Seek alternatives: Looking for remittance providers with lower costs or better verification processes

3. More Paperwork and Verification

Remittance providers will need to check if senders are U.S. citizens or nationals. This could mean:

• Longer wait times at banks or money transfer offices
• More documents needed to prove status
• Higher fees if providers pass on their compliance costs

4. Impact on Family Decisions

Some H-1B families may reconsider how they split their income or whether both spouses should work, knowing that sending more money abroad will mean paying more tax.

How Can H-1B Households Prepare?

With the tax set to begin after December 31, 2025, H-1B families have some time to plan. Here are some steps to consider:

• Review your remittance habits: Track how much you send and how often
• Consider consolidating transfers: Fewer, larger transfers may reduce fees and paperwork
• Use qualified remittance providers: Some may offer better verification and lower costs
• Consult a tax professional: Get advice on how the One Big Beautiful Bill Act affects your specific situation
• Stay informed: Watch for updates from the U.S. Treasury and IRS on how the tax will be implemented

For official updates and the full text of the bill, you can visit the U.S. Congress website.

What Do Experts and Advocacy Groups Say?

Immigrant advocacy groups have voiced strong concerns about the remittance excise tax. They argue that it unfairly targets immigrants who are simply trying to support their families. Dual-income households, in particular, will feel the pinch, as their combined remittances lead to a higher tax bill.

Tax policy experts point out that the tax may not be efficient. They say the cost of checking citizenship and collecting the tax could eat up much of the money raised. There is also a risk that people will turn to informal channels—like sending cash with friends or using unregulated services—to avoid the tax, which could reduce government revenue and increase risks for senders.

Government officials who support the bill say the tax is necessary to raise funds and ensure fairness. They note that exceptions are in place for U.S. citizens and that the tax rate was lowered from earlier proposals to reduce the burden.

Summary Table: Annual Remittance Excise Tax for H-1B Households

This table shows that dual-income H-1B households will pay twice as much in remittance excise tax as single-income households, assuming both earners send similar amounts.

What Else Is in the One Big Beautiful Bill Act?

The remittance excise tax is just one part of the OBBBA. The bill also:

• Tightens Medicaid eligibility: Making it harder for some immigrants to qualify for public health insurance
• Reduces ACA subsidies: Lowering financial help for health insurance under the Affordable Care Act
• Includes other tax changes: Affecting both individuals and businesses

These changes may also affect H-1B workers, especially those who are thinking about becoming permanent residents or citizens.

Frequently Asked Questions

Q: Will the remittance excise tax apply to green card holders?
A: The tax is aimed at nonresidents. Green card holders (permanent residents) are generally treated as residents for tax purposes and may be exempt, but it’s important to check the final rules from the IRS and Treasury.

Q: Can I avoid the tax by using a different remittance provider?
A: Only if the provider has an agreement with the U.S. Treasury to verify citizenship or residency status. Otherwise, the tax will apply.

Q: What if I send money through informal channels?
A: The tax only applies to formal remittance transfers. However, using informal channels can be risky and may violate other laws.

Q: How will the tax be collected?
A: Remittance providers will collect the tax at the time of transfer and send it to the government. You may need to show proof of citizenship or residency to avoid the tax.

Action Steps for H-1B Households

• Plan ahead: Review your family’s remittance needs before the tax takes effect
• Keep records: Save receipts and documents for all transfers
• Ask questions: Contact your remittance provider or a tax advisor if you’re unsure about the new rules
• Watch for updates: The IRS and Treasury will release more details as the start date approaches

Conclusion

The One Big Beautiful Bill Act’s 1% excise tax on remittance transfers is set to change the financial landscape for many H-1B households in the United States 🇺🇸. While the tax may seem small, it adds up quickly—especially for dual-income families who send more money abroad. The annual cost difference between single- and dual-income H-1B households can be significant, with dual-income families paying about twice as much in remittance excise tax.

This new rule highlights the importance of careful financial planning for immigrant families. By understanding how the tax works, keeping good records, and seeking professional advice, H-1B households can better manage the impact of the One Big Beautiful Bill Act and continue supporting their loved ones overseas.

For more information and official updates, visit the U.S. Congress website. Analysis from VisaVerge.com suggests that staying informed and proactive will be key for all affected families as these changes take effect in 2026.

Learn Today

One Big Beautiful Bill Act → Legislation introducing a 1% excise tax on remittances, effective after December 31, 2025.
Excise Tax → A special tax imposed on specific transactions like remittance transfers abroad.
Remittance Transfer → Money sent from U.S. residents to individuals in other countries.
H-1B Visa → A U.S. visa allowing skilled foreign workers to live and work temporarily in America.
Nonresident → A person living in the U.S. without permanent resident or citizen status, subject to this tax.

This Article in a Nutshell

The One Big Beautiful Bill Act’s 1% excise tax on remittances affects H-1B families sending money abroad, potentially doubling costs for dual-income households starting after 2025, requiring planning and awareness for impacted immigrant workers.
— By VisaVerge.com