Key Takeaways
• Starting January 1, 2026, a 1% remittance excise tax applies to personal transfers by H-1B visa holders.
• H-1B families cannot avoid the tax unless using remittance providers verifying U.S. citizenship or national status.
• The tax is non-refundable and adds financial burden to families supporting parents abroad.
As of July 6, 2025, H-1B families sponsoring parents abroad are set to face higher costs when sending money home, thanks to a new 1% remittance excise tax introduced under the One Big Beautiful Bill Act (OBBBA). This tax, which takes effect after December 31, 2025, will impact many immigrant families in the United States 🇺🇸, especially those who regularly send financial support to relatives overseas. Here’s what you need to know about the new law, how it affects H-1B families, and what steps you can take to prepare.
What Is the Remittance Excise Tax under the One Big Beautiful Bill Act?
The One Big Beautiful Bill Act is a new law passed by Congress that introduces a 1% excise tax on remittance transfers—that is, money sent abroad by people living in the United States 🇺🇸. The tax applies to non-commercial transfers, meaning it targets personal money sent to family or friends, not business payments. This includes funds sent by H-1B visa holders to support parents or other relatives in their home countries.
Originally, lawmakers proposed a much higher tax rate of 3.5%. However, after strong pushback from advocacy groups like Americans Citizens Abroad (ACA), the final version of the law set the tax at 1%. The new rule will apply to all qualifying remittances sent after December 31, 2025.
Who Will Have to Pay the Remittance Excise Tax?
The tax is designed to apply broadly to anyone in the United States 🇺🇸 who sends money abroad, with a few important exceptions:
- U.S. citizens or nationals who use remittance providers that have special agreements with the U.S. Treasury to verify citizenship status are exempt.
- Non-citizens, including H-1B visa holders, will generally have to pay the tax unless they can use a provider that verifies them as exempt.
- Residents for tax purposes (including many H-1B workers) are included, even if they are not U.S. citizens.
For many H-1B families, this means that every time they send money to parents or other relatives abroad, they will pay an extra 1% on top of any fees charged by the remittance provider. The only way to avoid the tax is to use a provider that can verify U.S. citizenship or national status, which is not an option for most H-1B visa holders.
How Will This Affect H-1B Families Sponsoring Parents Abroad?
Increased Cost of Sending Money
The most direct impact is financial. Every dollar sent abroad will now be subject to a 1% tax. For example:
- Sending $1,000 to parents will cost an extra $10 in tax.
- Sending $10,000 over the course of a year will cost an extra $100.
While 1% may sound small, these costs add up quickly for families who regularly send money home.
No Tax Credit or Refund
The remittance excise tax is not creditable or refundable. This means you cannot subtract it from your other U.S. taxes, nor can you get it back later. It is simply an extra cost on top of everything else.
Limited Ways to Avoid the Tax
To avoid the tax, you must use a remittance provider that can verify you are a U.S. citizen or national. For H-1B visa holders, this is not possible unless they have become citizens. Most H-1B families will have no choice but to pay the tax.
Indirect Impact on Family Sponsorship
While the tax does not change the rules for sponsoring parents or other relatives, it does make it more expensive to support them. For families who already face high living costs and visa fees, this new tax could make it harder to send regular support to loved ones abroad.
The Bigger Picture: H-1B Visa Costs and Family Sponsorship
H-1B families already face a range of costs related to their visa status. These include:
- H-1B registration fee: $215 (paid by employer)
- Basic filing fee: $460–$780 (depends on employer size)
- Anti-fraud fee: $500
- ACWIA training fee: $750–$1,500
- Public Law fee: $4,000 (for large employers)
- Optional premium processing: $2,805 (for faster processing)
These fees are paid by employers, but the overall process can still be expensive for families, especially if they need to renew visas or apply for green cards later. The new remittance excise tax adds another layer of cost for families who want to support parents or relatives back home.
For more details about H-1B visa fees and processes, you can visit the official USCIS H-1B Specialty Occupations page.
Why Was the Remittance Excise Tax Introduced?
Lawmakers say the tax is meant to raise money for the government and help track international money flows. However, many experts and advocacy groups argue that it unfairly targets immigrants and their families.
- Advocacy groups like ACA worked hard to reduce the tax rate and limit its scope. They succeeded in getting the rate lowered from 3.5% to 1% and in excluding some bank transfers from the tax.
- Critics say the tax will not raise much money for the government but will create high compliance costs and hurt immigrant families who rely on remittances.
According to analysis by VisaVerge.com, the tax could make it harder for families to send money home, especially those who use informal or low-cost remittance channels.
How Will the Tax Be Collected?
The U.S. Treasury Department will work with remittance providers (such as banks and money transfer companies) to collect the tax at the time the money is sent. Providers will be responsible for verifying whether the sender is a U.S. citizen or national and for collecting the tax from everyone else.
- Qualified remittance providers will have agreements with the Treasury to verify citizenship status.
- Non-qualified providers will have to collect the tax from all senders.
This means that H-1B families should expect to see the tax added to their remittance transactions starting January 1, 2026.
What Remittance Methods Are Affected?
The tax applies to most non-commercial remittance transfers, including:
- Bank transfers (unless sent by verified U.S. citizens through qualified providers)
- Money transfer services (like Western Union, MoneyGram, etc.)
- Informal channels (such as sending cash with friends or family)
Some bank or card-based transfers may be excluded if the provider has a special agreement with the Treasury, but most common methods used by H-1B families will be affected.
What Can H-1B Families Do to Prepare?
1. Check Your Remittance Provider
Ask your provider if they are a qualified remittance provider with the U.S. Treasury. If you are not a U.S. citizen or national, you will likely have to pay the tax.
2. Plan for Higher Costs
Start budgeting for the extra 1% tax on all money sent abroad after December 31, 2025. If you send large amounts or send money often, the costs can add up quickly.
3. Keep Good Records
Save all receipts and records of your remittance transactions and any taxes paid. This will help if there are any disputes or questions later.
4. Talk to a Tax Professional
The rules can be complex, especially if you have other international tax issues. A tax professional who understands the OBBBA and international remittance rules can help you stay compliant and avoid problems.
5. Stay Informed
Watch for updates from the U.S. Treasury and your remittance provider about how the tax will be collected and whether any new exemptions or changes are announced.
What Are the Broader Implications for Immigrant Families?
Financial Pressure
The new tax adds to the financial pressure already faced by many immigrant families. For H-1B families, who often send money to support elderly parents or pay for medical expenses abroad, even a small tax can make a big difference over time.
Impact on Family Support
Some families may have to reduce the amount they send home or send money less often. This could affect the well-being of parents and relatives who depend on this support.
Complicated Compliance
The new rules may make it harder for families to use informal or low-cost remittance channels, pushing them toward more expensive or complicated options.
Ongoing Advocacy
Groups like ACA continue to push for further exemptions or even repeal of the tax, arguing that it unfairly targets immigrants and does not provide clear benefits to the government or the public.
What Happens Next?
The remittance excise tax is set to take effect for all qualifying transfers sent after December 31, 2025. In the coming months, the U.S. Treasury Department will issue more detailed rules about how the tax will be collected and what documentation will be required.
- Remittance providers will need to update their systems to collect the tax and verify citizenship status.
- Families should watch for announcements from their providers and from the government about how to comply with the new rules.
Advocacy groups are expected to keep pushing for changes, so it is possible that the law could be amended or clarified before it takes full effect.
Key Resources for H-1B Families
- U.S. Treasury Department: Will provide official guidance and rules for the remittance excise tax.
- Americans Citizens Abroad (ACA): Advocacy group working to protect the interests of Americans and immigrants abroad.
- Immigration and Tax Attorneys: Can help with compliance and planning for the new tax.
- Remittance Providers: Your bank or money transfer service can explain how the tax will affect your transactions.
- USCIS and IRS Websites: For the latest information on visa fees, tax rules, and compliance requirements.
For official information about H-1B visas and related costs, visit the USCIS H-1B Specialty Occupations page.
Summary and Takeaways
H-1B families sponsoring parents abroad will face higher costs starting in 2026 due to the 1% remittance excise tax under the One Big Beautiful Bill Act. This tax applies to most personal money transfers sent abroad by non-citizens, including H-1B visa holders, unless they use a provider that can verify U.S. citizenship or national status. The tax is not refundable or creditable, adding a new financial burden to families who already face high visa-related expenses.
What should you do?
- Budget for the new tax on all remittances sent after December 31, 2025.
- Check with your remittance provider about how the tax will be collected.
- Keep records of all transactions and taxes paid.
- Consult a tax professional if you have questions or complex situations.
- Stay updated on any changes or new guidance from the government or advocacy groups.
As reported by VisaVerge.com, the new remittance excise tax is likely to have a significant impact on H-1B families and other immigrants who send money home. While advocacy efforts have reduced the tax rate and limited its scope, the financial and emotional impact on families remains real.
For now, the best approach is to prepare for the changes, seek professional advice if needed, and keep an eye on further developments as the law is implemented. If you have questions about your specific situation, reaching out to a qualified immigration or tax expert is strongly recommended.
For more information about the remittance excise tax and how it may affect you, visit the U.S. Treasury Department’s official website.
Learn Today
H-1B Visa → A U.S. visa allowing skilled foreign workers to live and work temporarily in the United States.
Remittance Excise Tax → A 1% tax on money sent abroad from the U.S. for personal, non-commercial purposes.
One Big Beautiful Bill Act → Legislation introducing a 1% tax on remittance transfers starting after December 31, 2025.
Qualified Remittance Provider → A service authorized to verify U.S. citizenship or national status to exempt senders from the tax.
Non-commercial Transfer → Money sent abroad to family or friends, not related to business or commercial transactions.
This Article in a Nutshell
H-1B families sponsoring parents abroad face a new 1% remittance excise tax starting 2026. This tax increases costs and affects personal money transfers, adding financial pressure alongside existing visa fees. Families should plan ahead, check remittance options, keep records, and consult professionals to manage this new burden effectively.
— By VisaVerge.com
