Key Takeaways
• OBBB proposes a 1% remittance tax on cross-border transfers after December 31, 2025.
• H-1B families may face higher costs and privacy concerns under the new tax.
• The tax could push remittances to informal or cryptocurrency methods, risking oversight.
As of July 2025, the United States 🇺🇸 Congress is debating the One Big Beautiful Bill Act (OBBB), a sweeping legislative proposal that includes a controversial remittance tax. This tax, which has shifted in rate and scope over several versions of the bill, is designed to apply to money sent from the United States 🇺🇸 to other countries. The latest version proposes a 1% tax on certain cross-border remittance transfers, set to take effect for transfers sent after December 31, 2025. Lawmakers argue that the tax will help fund border security and immigration enforcement, but critics warn it could have far-reaching effects—especially for H-1B families who regularly send money to loved ones abroad.
This article explains what the remittance tax is, how it works, and why it matters for H-1B families. It also explores the possible consequences, including the risk that families may turn to informal or cryptocurrency-based methods to avoid the tax. We’ll look at the perspectives of experts, the concerns of privacy advocates, and the practical challenges facing banks and individuals. Finally, we’ll offer guidance on what H-1B families and other stakeholders should watch for as the bill moves through Congress.
What Is the Remittance Tax in the One Big Beautiful Bill Act?
The remittance tax is a fee that would be charged on money transfers sent from the United States 🇺🇸 to other countries. These transfers, known as remittances, are a lifeline for millions of families worldwide. Many immigrants, including those on H-1B visas, send part of their earnings home to support relatives, pay for education, or cover medical expenses.
The OBBB’s remittance tax has changed several times:
- Initial proposal: 5% tax on remittance transfers
- Later versions: Reduced to 3.5%
- Most recent version: 1% tax on certain cross-border remittance transfers, effective for transfers after December 31, 2025
The tax would be collected by banks and other financial institutions when someone sends money abroad using formal channels like wire transfers, money transfer services, or bank apps.
Why Is the Remittance Tax Being Proposed?
Supporters of the remittance tax say it will:
- Raise money for border security and immigration enforcement
- Discourage illegal immigration by making it more expensive to send money out of the country
- Encourage use of the formal banking system by tracking who sends money abroad
However, critics argue that the tax could:
- Hurt law-abiding immigrants who use remittances to support families
- Push people toward informal or unregulated money transfer methods
- Create privacy and security risks by requiring banks to collect more personal information
How Would the Remittance Tax Affect H-1B Families?
H-1B families are among the groups most likely to feel the impact of the remittance tax. The H-1B visa allows skilled workers—often in technology, healthcare, and engineering—to live and work in the United States 🇺🇸. Many H-1B workers send money home to support parents, children, or other relatives.
Here’s how the tax could affect them:
1. Increased Cost of Sending Money
Even a 1% tax can add up over time. For example, if an H-1B worker sends $1,000 home each month, the tax would cost an extra $10 per transfer. Over a year, that’s $120—money that could have gone to family needs.
2. Privacy and Data Collection Concerns
To enforce the tax, banks would need to collect more information about customers’ immigration status. This could include:
- Proof of legal status (such as visa documents)
- Personal identification details
- Information about the recipient and purpose of the transfer
Some H-1B families may worry about sharing this information, especially if they have relatives with different immigration statuses or if they value privacy.
3. Compliance Burden for Financial Institutions
Banks and money transfer companies would face new rules and paperwork. They’d have to:
- Check immigration status for each remittance sender
- Collect and store sensitive data
- Report transfers to government agencies
This could slow down transfers, increase fees, or even lead some banks to stop offering remittance services.
4. Risk of Using Informal or Cryptocurrency Methods
Because of higher costs and privacy worries, some H-1B families might look for other ways to send money, such as:
- Informal remittance systems (like hawala, which uses trusted brokers instead of banks)
- Cryptocurrencies (like Bitcoin or Ethereum, which can be sent without revealing personal details)
While these methods can avoid the remittance tax, they come with risks. Informal systems may not offer legal protection if something goes wrong. Cryptocurrencies can be volatile, and not all family members abroad know how to use them.
Why Might H-1B Families Avoid Formal Remittance Channels?
Several factors could push H-1B families away from banks and toward less regulated options:
- Cost: Even a small tax adds to the expense of sending money, especially for families on tight budgets.
- Privacy: Some people don’t want to share personal or immigration details with banks or the government.
- Speed and convenience: Informal systems can be faster and require less paperwork.
- Trust: Some families trust community-based brokers more than large banks.
As reported by VisaVerge.com, experts warn that these pressures could drive remittances “underground,” making it harder for authorities to track money flows and protect consumers.
What Are Informal Remittance Systems?
Informal remittance systems, such as hawala, are networks of trusted brokers who move money without using banks. Here’s how it works:
- The sender gives cash to a local broker in the United States 🇺🇸.
- The broker contacts a partner in the recipient’s country.
- The partner gives the equivalent amount (minus a fee) to the recipient.
- The brokers settle accounts later, often using trade or other means.
These systems are popular in parts of Asia, Africa, and the Middle East. They’re fast, often cheaper than banks, and don’t require much paperwork. However, they’re not regulated, so there’s little recourse if money is lost or stolen.
What About Cryptocurrencies?
Cryptocurrencies like Bitcoin and Ethereum allow people to send money directly, without banks. Transactions are recorded on a public ledger called the blockchain, but users can remain anonymous if they take steps to hide their identity.
Advantages of using cryptocurrencies for remittances:
- No need for banks or government approval
- Lower fees in some cases
- Can be sent anywhere, anytime
Disadvantages:
- Value can change quickly (prices go up and down)
- Not everyone knows how to use them
- Some countries restrict or ban cryptocurrencies
- Harder to recover lost or stolen funds
What Do Experts Say About the Remittance Tax?
Privacy and Surveillance Concerns
Privacy advocates warn that the remittance tax could lead to more government surveillance. Banks would need to collect and share more data about customers, including their immigration status. This could make some people feel targeted or unsafe, especially if they have mixed-status families.
Economic Impact
The Tax Foundation, a nonpartisan research group, says the tax could hurt not just immigrants but also Americans who send money abroad for business, education, or family reasons. The extra paperwork and costs could discourage people from using banks, reducing the amount of money flowing through the formal financial system.
Regulatory Challenges
Implementing the remittance tax would require big changes to how banks operate. They’d need new systems to check immigration status, report transfers, and collect the tax. This could lead to mistakes, delays, or higher fees for everyone.
There’s also a risk that people will simply stop using banks and turn to informal or digital methods. This would make it harder for authorities to track money flows, fight crime, and protect consumers.
What Is the U.S. Government’s Position?
The U.S. Treasury Department has warned about the risks of informal remittance systems. They say it’s safer for people to use regulated banks, which have rules to prevent fraud and money laundering. The government wants to keep money in the formal system, but the remittance tax could have the opposite effect if people feel pushed out.
What Changes Are Possible Before the Bill Passes?
The OBBB is still being debated in Congress. The Senate has proposed changes to limit the scope of the remittance tax, suggesting that lawmakers are aware of the concerns. It’s possible that the final version of the bill will:
- Lower the tax rate further
- Limit which transfers are taxed
- Add exemptions for certain groups
- Delay or phase in the tax over time
Stakeholders—including banks, advocacy groups, and immigrant communities—are lobbying for changes to protect vulnerable families and avoid unintended consequences.
What Should H-1B Families and Other Stakeholders Do Now?
If you’re part of an H-1B family or regularly send money abroad, here are some steps to consider:
- Stay informed: Follow updates on the OBBB through official sources like the U.S. Congress website.
- Talk to your bank: Ask how they plan to handle remittance transfers if the tax passes.
- Consider your options: Weigh the pros and cons of formal, informal, and digital remittance methods.
- Protect your privacy: Be careful about sharing personal information and use secure channels for money transfers.
- Consult experts: If you have legal or financial questions, talk to a professional who understands immigration and banking rules.
What Are the Broader Implications for the United States 🇺🇸 and Immigrant Communities?
The remittance tax debate highlights the complex relationship between immigration policy, financial regulation, and family life. For many immigrants, sending money home is not just a financial transaction—it’s a way to stay connected and support loved ones.
If the tax pushes people out of the formal system, it could:
- Reduce government oversight of money flows
- Increase the risk of fraud or loss
- Make it harder for families to get help if something goes wrong
- Undermine trust in banks and government agencies
On the other hand, if the tax is carefully designed and implemented, it could raise needed funds without causing too much harm. The challenge is finding the right balance.
What’s Next for the One Big Beautiful Bill Act and the Remittance Tax?
As Congress continues to debate the OBBB, the future of the remittance tax remains uncertain. Lawmakers are weighing the need for border security funding against the risks of driving remittances underground. The final outcome will depend on negotiations between the House and Senate, as well as input from stakeholders.
For H-1B families and others who rely on remittances, the coming months will be critical. Staying informed, asking questions, and planning ahead can help you adapt to any changes.
Key Takeaways
- The One Big Beautiful Bill Act includes a proposed remittance tax that could affect anyone sending money from the United States 🇺🇸 to other countries, especially H-1B families.
- The tax rate has changed over time, with the latest version proposing a 1% tax on certain transfers starting in 2026.
- The tax could push some families to use informal or cryptocurrency-based methods to avoid extra costs and protect their privacy.
- Experts warn that this could reduce oversight, increase risks, and hurt both immigrants and the broader financial system.
- The bill is still being debated, and changes are possible before it becomes law.
- H-1B families should stay informed, talk to their banks, and consider all their options for sending money abroad.
For the latest updates and official information, visit the U.S. Congress website. Analysis from VisaVerge.com suggests that the remittance tax debate is far from over, and its outcome will shape how millions of families manage their finances and support loved ones across borders.
By understanding the issues and preparing for possible changes, H-1B families and other stakeholders can make informed decisions and protect their interests in a changing immigration landscape.
Learn Today
Remittance Tax → A fee charged on money sent from the U.S. to other countries via formal transfers.
H-1B Visa → A U.S. visa allowing skilled foreign workers, often in tech or healthcare, to work temporarily.
Informal Remittance Systems → Unregulated networks like hawala that transfer money without banks using trusted brokers.
Cryptocurrency → Digital money like Bitcoin used for transfers without formal banking or government oversight.
One Big Beautiful Bill Act → A comprehensive U.S. legislative proposal including immigration and tax reforms, notably a remittance tax.
This Article in a Nutshell
The One Big Beautiful Bill Act’s proposed 1% remittance tax will affect H-1B families sending money abroad. This may increase costs, privacy risks, and encourage informal or crypto transfers. OBBB’s debated changes could reshape immigrant financial support, prompting families to prepare for evolving regulations in 2026 and beyond.
— By VisaVerge.com
