Key Takeaways
• The One Big Beautiful Bill Act proposes a 3.5% remittance tax on money sent abroad from the U.S. starting July 2025.
• H-1B visa holders must comply with new IRS rules, update Form W-9, and prepare for stricter foreign account reporting.
• The bill awaits Senate approval, with possible changes affecting remittance tax and financial reporting requirements for immigrants.
As of July 3, 2025, the United States 🇺🇸 is on the verge of major changes in its immigration and tax landscape. The One Big Beautiful Bill Act (H.R. 1), passed by the U.S. House of Representatives on May 22, 2025, is now under Senate review. This sweeping bill covers a wide range of topics, but for many immigrants—especially H-1B holders—the most pressing questions center on new financial reporting rules and a proposed Remittance Tax. These changes could affect how H-1B visa holders manage their money, send funds abroad, and comply with U.S. tax laws.
This article breaks down what the One Big Beautiful Bill Act means for H-1B holders, what new IRS reporting requirements might look like, and how the proposed remittance tax could impact everyday life. We’ll also look at what’s staying the same, what might change, and what steps H-1B holders should take to stay compliant and avoid penalties.
What Is the One Big Beautiful Bill Act and Who Does It Affect?
The One Big Beautiful Bill Act is a large piece of legislation that aims to change several U.S. policies at once. While it focuses mainly on immigration enforcement, tax cuts, and government spending, it also includes new rules about how people send money out of the United States 🇺🇸 and how they report their foreign bank accounts.
H-1B holders—skilled workers from other countries who are allowed to work in the United States 🇺🇸 for a set period—are among those most affected by these changes. Many H-1B holders regularly send money to family members in their home countries, maintain bank accounts abroad, or have other international financial ties.
The Remittance Tax: What Is It and How Does It Work?
One of the most talked-about parts of the bill is the Remittance Tax. Here’s what you need to know:
- What is a remittance? A remittance is money sent by someone in the United States 🇺🇸 to a person in another country. For example, an H-1B holder might send money to support family back home.
- What does the bill propose? The One Big Beautiful Bill Act introduces a 3.5% excise tax on remittance transfers. This means that for every $1,000 sent abroad, $35 would be collected as tax.
- Who pays the tax? The tax applies to anyone sending money from the United States 🇺🇸 to a foreign recipient, including resident aliens (people who live and pay taxes in the U.S. but are not citizens), such as H-1B holders.
- How will it be collected? The tax would likely be collected by financial institutions or money transfer services at the time the money is sent.
Example:
If an H-1B holder sends $5,000 to their family in India 🇮🇳, the remittance tax would be $175. This amount would be added to the cost of the transfer, making it more expensive to send money home.
Why Is the Remittance Tax Important for H-1B Holders?
For many H-1B holders, sending money to family abroad is a regular part of life. The new remittance tax could:
- Increase the cost of supporting family members in other countries
- Change how often or how much money is sent
- Require more careful financial planning to avoid unexpected costs
According to analysis by VisaVerge.com, the remittance tax could have a big impact on the budgets of H-1B holders and other immigrants who regularly send money abroad. Many will need to rethink how they manage their finances and may need to consult with financial advisors to find the best way to handle these new costs.
New IRS Reporting Requirements: What Might Change?
The One Big Beautiful Bill Act also hints at new or updated IRS reporting requirements, especially for those involved in international money transfers. Here’s what H-1B holders should watch for:
1. Revised Form W-9
- What is Form W-9? This is a form used by the IRS to collect taxpayer identification information from individuals and businesses in the United States 🇺🇸. You can find the official form here.
- What might change? The bill suggests that Form W-9 may be updated to include questions about remittance transfers and to help financial institutions determine who is subject to the new remittance tax.
- What does this mean for H-1B holders? You may be asked to provide more information about your citizenship and tax residency status when filling out or updating Form W-9. This could include details about your visa status and whether you plan to send money abroad.
2. Backup Withholding Rules
- What is backup withholding? This is when a payer (like a bank) withholds a percentage of certain payments and sends it to the IRS if the payee does not provide the correct taxpayer identification number.
- How does it relate to the remittance tax? The IRS may use backup withholding as a way to make sure the remittance tax is collected, especially if there is confusion about a person’s status or if the right forms are not provided.
Foreign Account Reporting: FATCA and FBAR
While the One Big Beautiful Bill Act does not directly change existing foreign account reporting rules, H-1B holders must still follow current laws. Two important rules are:
1. FATCA (Foreign Account Tax Compliance Act)
- Who must comply? U.S. taxpayers, including resident aliens like H-1B holders, who have foreign financial assets above certain limits.
- What must be reported? Foreign bank accounts, stocks, and other financial assets.
- How is it reported? On Form 8938, which is filed with your annual tax return.
- Thresholds: The reporting threshold varies, but for most single filers living in the U.S., it’s $50,000 on the last day of the year or $75,000 at any time during the year.
2. FBAR (Report of Foreign Bank and Financial Accounts)
- Who must comply? Anyone in the United States 🇺🇸 with foreign bank accounts totaling more than $10,000 at any time during the year.
- How is it reported? On FinCEN Form 114, which is filed electronically with the Financial Crimes Enforcement Network (FinCEN), not the IRS.
Key Point:
Even though the One Big Beautiful Bill Act does not change FATCA or FBAR, H-1B holders must still report their foreign accounts if they meet the thresholds. Failing to do so can lead to heavy fines.
Practical Implications: What Should H-1B Holders Do Now?
With these changes on the horizon, H-1B holders should take several steps to prepare:
1. Review Your Remittance Habits
- Calculate how much you send abroad each year. If you regularly send money to family, add up the total to see how much the 3.5% remittance tax would cost you.
- Consider sending larger, less frequent transfers to reduce the number of times you pay the tax.
2. Update Your Documentation
- Check your Form W-9 status with your bank or money transfer service. Make sure all your information is up to date and correct.
- Be ready to provide extra documents if asked, especially about your visa status and tax residency.
3. Stay Compliant with Foreign Account Reporting
- List all your foreign bank accounts and assets. If you meet the FATCA or FBAR thresholds, make sure you file the correct forms every year.
- Keep records of all international transfers and account balances. This will help if you are ever audited or asked for proof.
4. Consult a Tax Professional
- Talk to a tax advisor who understands both U.S. and international tax rules. They can help you plan your finances and avoid mistakes.
- Ask about the best way to handle remittances and foreign accounts under the new rules.
The Legislative Process: What Happens Next?
The One Big Beautiful Bill Act is not yet law. After passing the House of Representatives, it must go through the Senate. Here’s what to expect:
- Senate Review: The Senate can change, remove, or add provisions to the bill. This means the final version could look different from what was passed in the House.
- Reconciliation: If the Senate makes changes, both chambers must agree on a final version.
- Simple Majority Needed: Because the bill is moving through the budget reconciliation process, it only needs a simple majority in the Senate to pass.
- Possible Changes: Provisions affecting H-1B holders, the remittance tax, or reporting requirements could be changed or dropped before the bill becomes law.
Stay Updated:
For the latest information, check the U.S. Congress website and the IRS website. These sites provide official updates on the bill’s progress and any changes to tax rules.
Stakeholder Perspectives: Who Is Affected and How?
1. H-1B Holders and Other Immigrants
- Directly affected by the remittance tax and new reporting requirements
- May face higher costs for sending money abroad
- Need to be more careful with financial planning and documentation
2. Financial Institutions
- Must update their systems to collect the remittance tax and verify customer status
- May require more paperwork from customers, leading to longer processing times
3. Immigration Advocates
- Concerned about the impact on immigrant families who rely on remittances
- May push for changes to reduce the burden on non-citizens
4. Tax Professionals and Advisors
- Will need to guide clients through new rules and help them stay compliant
- May see increased demand for services from H-1B holders and other immigrants
Expert Analysis: What Are the Risks and Opportunities?
Experts in immigration and tax law are watching the One Big Beautiful Bill Act closely. They point out several key issues:
- Clarity Needed: The bill’s language about who is subject to the remittance tax and what documentation is required is still being worked out. Clear guidance from the IRS will be needed.
- Risk of Double Taxation: Some worry that H-1B holders could face taxes both in the United States 🇺🇸 and in their home countries if they are not careful.
- Opportunities for Planning: With the right advice, H-1B holders can adjust their financial habits to reduce costs and avoid penalties.
VisaVerge.com reports that staying informed and proactive is the best way for H-1B holders to protect themselves as the law changes.
Action Steps: What Should You Do Next?
If you are an H-1B holder or someone who regularly sends money abroad, here’s what you can do now:
- Monitor the bill’s progress in the Senate and watch for updates from official sources.
- Review your remittance and foreign account activity to see if you will be affected by the new tax or reporting rules.
- Update your paperwork with banks and money transfer services, especially Form W-9.
- Consult a tax professional to make sure you are following all the rules and to get advice on the best way to manage your finances.
- Keep good records of all international transfers and foreign accounts.
Conclusion
The One Big Beautiful Bill Act could bring big changes for H-1B holders and other immigrants in the United States 🇺🇸. The proposed remittance tax and possible new IRS reporting requirements mean that sending money abroad and managing foreign accounts may become more complicated and expensive. By staying informed, updating documentation, and seeking professional advice, H-1B holders can prepare for these changes and avoid costly mistakes.
For the most reliable and up-to-date information, always check official government sources like the IRS website and the U.S. Congress website. Taking these steps now will help you stay ahead of the curve as the law continues to evolve.
Learn Today
One Big Beautiful Bill Act → Legislation proposing immigration enforcement and new remittance tax starting mid-2025 for U.S. taxpayers.
H-1B holders → Skilled foreign workers authorized to live and work temporarily in the United States under H-1B visa.
Remittance Tax → A proposed 3.5% excise tax on money sent abroad from the U.S. to foreign recipients.
Form W-9 → IRS form used to collect taxpayer identification and verify residency status for financial reporting.
FATCA → Foreign Account Tax Compliance Act requiring U.S. taxpayers to report specified foreign financial assets annually.
This Article in a Nutshell
The One Big Beautiful Bill Act may impose a 3.5% remittance tax impacting H-1B holders. New IRS reporting rules and foreign account regulations also demand careful compliance starting July 2025, reshaping immigrant financial obligations and requiring updated documentation for money transfers abroad.
— By VisaVerge.com
