Key Takeaways
• The One Big Beautiful Bill Act imposes a 3.5% excise tax on all remittances sent abroad by non-citizen immigrants.
• No exemptions or credits exist for remittances sent for education or medical support, affecting H-1B visa holders.
• Financial providers must collect detailed personal data, raising privacy concerns and potential risks for immigrant senders.
As of July 6, 2025, immigrants working in the United States 🇺🇸—including H-1B visa holders—face a new financial challenge: the One Big Beautiful Bill Act (H.R. 1). This sweeping legislation, passed by the House in May and narrowly approved by the Senate in early July, introduces a 3.5% excise tax on remittances sent abroad. The tax applies to all non-citizen senders, with no exemptions or credits for money sent for education or medical support. This change has sparked concern among immigrant communities, advocacy groups, and financial service providers, who warn of increased burdens and privacy risks for those who regularly send money home to support loved ones.
What Is the One Big Beautiful Bill Act and Who Does It Affect?
The One Big Beautiful Bill Act is a major piece of legislation that aims to reshape several aspects of U.S. policy, including taxes, immigration, and federal spending. One of its most talked-about features is the new excise tax on remittances—money sent from the United States 🇺🇸 to other countries by people working here. The tax is set at 3.5% of the amount sent and is collected by financial service providers at the time of the transaction.
Who pays this tax?
– Immigrants working in the United States 🇺🇸, including those on H-1B visas, must pay the tax when sending money abroad.
– U.S. citizens and nationals are exempt from this tax, meaning only non-citizens are affected.
Why was this tax introduced?
– The stated goal is to raise federal revenue and help offset other tax cuts included in the bill.
– Lawmakers also argue that it will help fund immigration enforcement and other government programs.
No Exemptions or Credits for Education or Medical Remittances
A key question for many immigrants is whether the law makes exceptions for money sent home for important reasons, like paying for a family member’s education or medical care. The answer, as of July 6, 2025, is no.
There are no exemptions or credits in the One Big Beautiful Bill Act for remittances related to education or medical support by H-1B visa holders or any other immigrant group. This means:
- All remittances sent abroad by non-citizens are taxed at 3.5%, no matter the reason.
- Sending money to pay for a child’s school fees or a parent’s hospital bills does not qualify for any special relief or deduction.
- The tax applies equally to every dollar sent, regardless of whether it is for basic living expenses, education, or urgent medical needs.
How the Remittance Excise Tax Works
The new tax is collected at the point of transaction by banks, money transfer companies, and other financial service providers. Here’s how it works in practice:
- When you send money abroad, the provider will charge an extra 3.5% on top of any other fees.
- The provider is responsible for collecting the tax and sending it to the U.S. government.
- You will need to provide personal information, including your immigration status, to complete the transaction.
Example:
If an H-1B visa holder sends $1,000 to their family in India 🇮🇳 for a relative’s surgery, they will pay an extra $35 in excise tax, plus any regular transfer fees.
Privacy and Security Concerns
The law requires financial service providers to collect detailed personal information about both the sender and the recipient. This has raised several concerns:
- Privacy: Immigrants may worry about how their personal data is stored and shared, especially if they are sending money to countries with less secure banking systems.
- Security: Some fear that the new rules could push people to use informal or unregulated channels to avoid the tax, which can be riskier and less secure.
According to analysis by VisaVerge.com, these requirements could make life more difficult for immigrants who rely on remittances to support family members abroad, especially when those funds are used for essential needs like education and healthcare.
No Relief for Education or Medical Support
Many immigrants send money home to pay for their children’s school fees or to cover medical bills for relatives. Under the new law:
- There are no special exemptions for remittances used for education or medical support.
- No tax credits or deductions are available for these types of remittances.
- All remittances are treated the same, regardless of their purpose.
This is a major change from some earlier proposals, which considered allowing exceptions for certain types of remittances. However, the final version of the bill does not include any such relief.
Other Education and Medical Provisions in the Bill
While the One Big Beautiful Bill Act does include some changes related to education and healthcare, these do not affect the remittance tax:
- Education: The bill expands what counts as a “qualified educational expense” for 529 savings plans, allowing more K-12 and homeschooling costs to be paid tax-free. However, this only helps people saving for education in the United States 🇺🇸 and does not relate to remittances sent abroad.
- Medical: The bill makes it harder for immigrants to qualify for Medicaid and the Children’s Health Insurance Program (CHIP) by tightening eligibility and verification rules. This affects access to healthcare in the United States 🇺🇸, not remittances sent for medical care abroad.
In summary:
There is no connection between these domestic education and medical provisions and the excise tax on remittances. Immigrants sending money abroad for these reasons still face the full 3.5% tax.
Impact on H-1B Visa Holders
H-1B visa holders are skilled workers who come to the United States 🇺🇸 to fill specialized jobs, often in technology, engineering, or healthcare. Many have families back home who depend on their financial support. The new remittance tax affects them in several ways:
- Increased Cost: Every time an H-1B visa holder sends money home, they must pay the 3.5% tax, regardless of the reason.
- No Relief for Essential Support: Even if the money is used for a child’s education or a parent’s medical treatment, there is no exemption or credit.
- Added Burden: For families who rely on regular remittances, the extra cost can add up quickly, making it harder to meet basic needs.
Example Scenario:
An H-1B visa holder sends $500 each month to support their parents’ medical expenses in the Philippines 🇵🇭. Over a year, they will pay $210 in excise tax alone, not counting other transfer fees.
How Does This Compare to Other Tax Provisions?
The One Big Beautiful Bill Act includes several other tax changes, some of which also affect immigrants:
- Education Tax Credits: These are now only available to people with a Social Security Number (SSN). Many immigrants, including some H-1B visa holders, may not qualify if they do not have an SSN.
- No Remittance Credits: There are no credits or deductions for remittances, even if they are used for education or medical support.
- Domestic vs. International Support: The bill’s tax benefits are focused on people living and spending money in the United States 🇺🇸, not those supporting family abroad.
Criticism from Advocacy Groups and Financial Providers
The new remittance tax has drawn strong criticism from several groups:
- Immigrant Advocacy Groups: They argue that the tax unfairly targets immigrants who are simply trying to support their families. Many say it will make it harder for children to go to school or for sick relatives to get medical care.
- Financial Service Providers: Companies that handle money transfers warn that the tax could push people to use informal channels, which are less secure and harder to track.
- Privacy Advocates: The requirement to collect detailed personal information raises concerns about data security and the risk of identity theft.
No Signs of Change or Exemptions
So far, there is no indication from Congress or government officials that exemptions or credits will be added for education or medical remittances. The focus of the bill is on raising revenue and tightening immigration rules, not on providing relief to immigrant workers.
- No amendments have been proposed to create exemptions for H-1B visa holders or other immigrants.
- Lawmakers have not signaled any plans to revisit this issue in the near future.
Legislative Background and Status
The One Big Beautiful Bill Act passed the House of Representatives on May 22, 2025, and the Senate approved its version on July 1, 2025. Some parts of the bill may still be subject to negotiation before it becomes law, but the remittance excise tax is expected to remain in place as written.
- The tax is part of a larger effort to increase federal revenue and pay for other tax cuts.
- It is also linked to broader immigration enforcement measures included in the bill.
For the latest updates and official information on the bill’s status, readers can visit the U.S. Congress official legislation page.
What Should H-1B Visa Holders and Other Immigrants Do?
If you are an H-1B visa holder or another immigrant who sends money abroad, here are some steps you can take:
- Plan for Higher Costs: Factor the 3.5% excise tax into your budget when sending money home.
- Use Reputable Providers: Stick to well-known financial service companies to ensure your money is safe and your personal information is protected.
- Keep Records: Save receipts and documentation for all remittance transactions in case you need to prove the purpose or amount sent.
- Stay Informed: Watch for any changes to the law or new guidance from the government or financial service providers.
Key Takeaways
- The One Big Beautiful Bill Act imposes a 3.5% excise tax on all remittances sent abroad by immigrants, including H-1B visa holders.
- There are no exemptions or credits for remittances related to education or medical support.
- U.S. citizens and nationals are exempt from the tax.
- The law requires financial service providers to collect detailed personal information, raising privacy concerns.
- Advocacy groups warn that the tax will make it harder for immigrants to support their families’ basic needs.
- No changes or exemptions are expected in the near future.
Practical Guidance
- Budget for the new tax when sending money abroad.
- Use secure, regulated channels for remittances to avoid security risks.
- Monitor official government sources for updates on the law and its implementation.
For more details on the H-1B visa program and related immigration forms, visit the USCIS H-1B Specialty Occupations page.
As reported by VisaVerge.com, the new remittance excise tax represents a significant change for immigrants working in the United States 🇺🇸, especially H-1B visa holders who regularly send money home for education or medical support. With no exemptions or credits in the current law, affected individuals should prepare for higher costs and stay alert for any future policy updates.
Learn Today
Excise Tax → A tax levied on a specific good or transaction, here applied to money sent abroad as remittances.
H-1B Visa Holder → A foreign worker authorized to work temporarily in the US in specialized occupations like tech or healthcare.
Remittance → Money sent by immigrants from the US to support family members living in other countries.
One Big Beautiful Bill Act → A broad US law passed in 2025 that includes new taxes and immigration enforcement measures.
Financial Service Provider → Companies like banks or money transfer firms that handle and process remittance transactions.
This Article in a Nutshell
Starting July 6, 2025, the One Big Beautiful Bill Act enforces a 3.5% tax on remittances by non-citizen immigrants, including H-1B holders, with no exemptions for education or medical support, adding financial strain and privacy concerns for immigrant families sending money abroad.
— By VisaVerge.com
