Key Takeaways
• The One Big Beautiful Bill imposes a 3.5%-5% remittance tax on non-U.S. citizens after December 31, 2025.
• H-1B visa holders and green card holders must pay the tax; only U.S. citizens and nationals are exempt.
• Banks will withhold tax at transfer; new compliance and reporting requirements will add costs and complexity.
A sweeping new tax rule is set to reshape how immigrants in the United States 🇺🇸 send money to their families abroad. The One Big Beautiful Bill (OBBB), a major piece of tax and budget legislation, passed both the Senate and House in early July 2025 and now awaits the President’s signature. At the heart of this bill is a new remittance tax that will directly affect millions of non-U.S. citizens—including both H-1B visa holders and green card holders—who regularly transfer funds to loved ones in their home countries. The new law is expected to take effect for transfers made after December 31, 2025.
Who is affected, what is changing, and why does it matter? This article breaks down the details of the remittance tax under the One Big Beautiful Bill, explains how it impacts H-1B visa holders and green card holders, and explores what immigrant families and financial institutions need to know before the new rules kick in.
What Is the Remittance Tax in the One Big Beautiful Bill?
The One Big Beautiful Bill introduces a remittance excise tax—a fee charged on money sent from the United States 🇺🇸 to other countries. This tax will be collected by banks and money transfer services at the time of the transaction. The tax rate is set to fall between 1% and 5% of the amount sent, with most reports suggesting a likely rate of 3.5% or 5%. The exact rate may depend on future regulations or guidance from the U.S. Treasury.
Key facts about the remittance tax:
– Applies to all cross-border money transfers made by non-U.S. citizens after December 31, 2025.
– Collected at the point of transfer by financial institutions, not by the IRS directly.
– No minimum threshold—even small transfers are taxed.
– Only U.S. citizens and nationals are exempt. Green card holders, despite their permanent resident status, are not considered citizens and will be taxed.
Who Will Pay the Remittance Tax?
The new tax targets non-U.S. citizens. This includes:
– H-1B visa holders (temporary skilled workers)
– Green card holders (permanent residents who are not yet naturalized citizens)
– Other visa holders, such as F-1 students, L-1 intracompany transferees, and those on temporary protected status
Who is NOT subject to the tax?
– U.S. citizens (including naturalized citizens)
– U.S. nationals (such as those born in certain U.S. territories)
Why are green card holders included?
While green card holders are permanent residents and pay U.S. taxes on their worldwide income, they are not U.S. citizens. The One Big Beautiful Bill specifically exempts only “verified U.S. citizens or nationals.” This means that green card holders will face the same remittance tax obligations as H-1B visa holders and other non-citizens.
How Will the Remittance Tax Work in Practice?
Collection and Compliance
When a non-citizen sends money abroad using a bank or a money transfer service, the provider will:
– Check the sender’s citizenship status using documents and forms already required for financial transactions.
– Withhold the remittance tax from the amount being sent.
– Report and remit the tax to the U.S. government as required by law.
Example:
If an H-1B visa holder sends $1,000 to family in India 🇮🇳 and the tax rate is 3.5%, the sender will pay an extra $35 in tax, making the total cost $1,035. The recipient will receive $1,000, but the sender pays more out of pocket.
How Will Banks and Money Transfer Services Know Who to Tax?
Financial institutions already collect information about their customers’ identity and immigration status for tax and anti-money laundering purposes. They often use IRS Form W-9 to confirm if someone is a U.S. person for tax reasons. However, for the remittance tax, the key question is citizenship, not just residency.
- Form W-9: Used to confirm U.S. residency for tax purposes. Green card holders are considered “resident aliens” and fill out this form, but for the remittance tax, only U.S. citizens and nationals are exempt.
- Verification process: Banks and transfer services will need to update their systems to check for citizenship, not just residency. This may mean asking for passports or other proof of citizenship before processing a remittance without the tax.
You can find the official IRS Form W-9 here.
Why Is the Remittance Tax Being Introduced?
Supporters of the One Big Beautiful Bill argue that the remittance tax will:
– Raise billions in new tax revenue for the United States 🇺🇸 budget.
– Help cover the costs of government programs and services.
– Ensure that non-citizens contribute more to the U.S. economy, especially if they are sending large sums abroad.
Critics, including many immigrant advocacy groups, say the tax unfairly targets immigrants who support families in their home countries. They argue that:
– The tax will increase the financial burden on immigrant families.
– It may discourage legal money transfers, pushing some people to use informal or unregulated channels.
– It could hurt the economies of countries that rely on remittances from the United States 🇺🇸.
What Does This Mean for H-1B Visa Holders and Green Card Holders?
Equal Treatment Under the Law
Both H-1B visa holders and green card holders will face the same remittance tax obligations under the One Big Beautiful Bill. This is a major change, as green card holders have often been treated more like citizens for tax purposes in the past.
Key points for both groups:
– No exemption for green card holders—only U.S. citizens and nationals are exempt.
– Tax applies to every transfer abroad, no matter how small.
– Financial institutions will handle the tax automatically—there is no need for individuals to file extra forms, but they will see the tax deducted from their transfer.
Impact on Immigrant Communities
The new tax will have a direct impact on many immigrant communities, especially those who regularly send money to support family members overseas. For example:
– Indian, Filipino, Mexican, and Nigerian communities in the United States 🇺🇸 are among the largest senders of remittances worldwide.
– Even a small tax can add up over time, especially for families who send money every month.
Practical effects:
– Higher costs for families: The tax reduces the amount of money reaching families abroad or increases the cost for senders.
– Administrative challenges: Banks and transfer services must update their systems to comply with the new law.
– Potential for confusion: Some green card holders may not realize they are subject to the tax, leading to surprises at the time of transfer.
What Are the Exemptions and Are There Any Loopholes?
Exemptions:
– Only “verified U.S. citizens or nationals” are exempt from the remittance tax.
– There is no minimum transfer amount—the tax applies to all remittances, large or small.
No exemption for green card holders:
– Even though green card holders are permanent residents and pay U.S. taxes, they are not exempt from the remittance tax unless they become naturalized U.S. citizens.
No clear loopholes:
– The law is written to cover all non-citizens, regardless of visa or residency status.
– Attempting to avoid the tax by sending money through informal channels (such as giving cash to travelers) may violate other laws and carries risks.
How Will This Affect Banks and Money Transfer Services?
Financial institutions will face new compliance and reporting requirements:
– Update systems to identify non-citizen senders and apply the tax.
– Train staff to handle new procedures and answer customer questions.
– Report remittance tax collections to the government as required.
These changes may lead to:
– Higher administrative costs for banks and transfer services.
– Longer processing times for some remittance transactions.
– Possible increases in service fees to cover the cost of compliance.
What Should H-1B Visa Holders and Green Card Holders Do Now?
Steps to Prepare
- Check your citizenship status: If you are not a U.S. citizen or national, you will be subject to the remittance tax.
- Plan ahead for higher costs: Factor the new tax into your budget if you regularly send money abroad.
- Ask your bank or money transfer service about how they will handle the new tax and what documentation you may need to provide.
- Consider the timing of transfers: The tax takes effect for transfers made after December 31, 2025. If you plan to send a large amount, you may want to do so before the deadline.
- Stay informed: Watch for updates from the IRS and your financial institution about how the tax will be implemented.
For Those Considering U.S. Citizenship
If you are a green card holder and eligible to apply for U.S. citizenship, becoming a citizen would exempt you from the remittance tax. However, the naturalization process takes time and has its own requirements.
You can find more information about U.S. citizenship and the naturalization process on the USCIS official website.
Broader Implications for Immigrant Families and the U.S. Economy
For immigrant families:
– The remittance tax could mean less money reaching relatives in countries where every dollar counts.
– Some families may need to send larger amounts less often to reduce the impact of the tax.
For the U.S. economy:
– The government expects to raise billions in new revenue.
– There is concern that the tax could push some remittances into informal channels, making them harder to track and regulate.
For countries that rely on remittances:
– Many developing countries depend on money sent from the United States 🇺🇸 to support their economies.
– A drop in remittances could have ripple effects, especially in countries like India 🇮🇳, Mexico 🇲🇽, and the Philippines 🇵🇭.
What Do Experts and Advocacy Groups Say?
Financial and tax advisors warn that the remittance tax will increase costs for non-citizens and require major updates to banking systems. They recommend that clients review their remittance habits and prepare for the new rules.
Immigrant advocacy groups argue that the tax unfairly targets immigrants and could hurt families both in the United States 🇺🇸 and abroad. They are calling for exemptions or lower rates for small transfers and for permanent residents.
Government relations professionals are closely watching the bill’s progress and advising clients on how to comply with the new law.
As reported by VisaVerge.com, the remittance tax under the One Big Beautiful Bill is one of the most significant changes to affect immigrants’ financial lives in recent years. The site notes that both H-1B visa holders and green card holders will need to adjust their financial planning to account for the new tax.
Official Resources and Where to Learn More
- Track the status and text of the One Big Beautiful Bill (H.R.1) on the U.S. Congress official website.
- IRS guidance on taxation of alien individuals is available, but does not yet cover the new remittance tax specifics. Check the IRS website for updates.
- For legal and tax advice, you can contact professionals such as Edward Hild ([email protected]) or Sahel A. Assar ([email protected]).
Key Takeaways
- The remittance tax in the One Big Beautiful Bill will apply to both H-1B visa holders and green card holders, as both are considered non-U.S. citizens for this purpose.
- The tax rate will likely be 3.5% or 5% and will be collected on all cross-border money transfers made after December 31, 2025.
- Only U.S. citizens and nationals are exempt—green card holders are not.
- Financial institutions will handle the tax automatically, but senders should be prepared for higher costs and possible new documentation requirements.
- Immigrant families should plan ahead for the new tax and stay informed as more details become available.
The One Big Beautiful Bill’s remittance tax marks a major shift in how the United States 🇺🇸 treats money sent abroad by immigrants. Both H-1B visa holders and green card holders will need to adjust to these changes, and the full impact will become clear as the law takes effect in 2026. For now, staying informed and planning ahead are the best ways to prepare for this new reality.
Learn Today
One Big Beautiful Bill → Major 2025 U.S. tax law imposing a remittance tax on non-citizens sending money abroad after 2025.
Remittance Tax → A fee charged on money sent internationally from the U.S. by non-citizens, typically 3.5% to 5%.
H-1B Visa Holder → Non-immigrant skilled worker visa holders subject to the remittance tax under the new law.
Green Card Holder → Permanent U.S. resident, non-citizen required to pay the remittance tax on international transfers.
Form W-9 → IRS form verifying U.S. residency status; used by banks to confirm citizenship for remittance tax exemption.
This Article in a Nutshell
The One Big Beautiful Bill introduces a remittance tax for non-citizens starting 2026. H-1B visa and green card holders face new costs on sending money abroad, while banks adapt to compliance challenges. This major legislative shift will impact immigrant families and financial institutions in the United States.
— By VisaVerge.com
