Key Takeaways
• The remittance tax in OBBBA is set at 1% for transfers over $15 without citizenship proof.
• H-1B/F-1 visa holders, green-card applicants, and non-citizens may pay this tax sending money abroad.
• Financial institutions must verify citizenship, possibly causing delays and extra paperwork for transfers.
As of July 3, 2025, the United States 🇺🇸 Congress is debating a new remittance tax as part of the One Big Beautiful Bill (OBBBA). This tax has drawn attention from immigrant communities, financial institutions, and policy experts. The remittance tax, which targets international money transfers, could directly affect H-1B/F-1 visa holders, green-card applicants, and other non-citizen workers. Here’s what you need to know about who is impacted, how the tax works, and what it means for people sending money abroad.
What Is the OBBBA Remittance Tax and Who Is Affected?
The remittance tax in the OBBBA is a fee on money sent from the United States 🇺🇸 to other countries. The idea is to collect a small percentage from each international money transfer. The tax has changed several times during the legislative process:
- Originally proposed at 5%
- Reduced to 3.5% in a manager’s amendment
- Currently set at 1% in the Senate version as of July 2025
The tax applies to any international transfer over $15, unless the sender can prove they are a U.S. citizen. This means that many people who are not citizens—including H-1B/F-1 visa holders and green-card applicants—could be required to pay this tax when sending money to family or friends outside the United States 🇺🇸.
H-1B/F-1 Visa Holders
H-1B visa holders are skilled workers, often in technology or healthcare, who come to the United States 🇺🇸 for jobs that require special skills. F-1 visa holders are international students studying at U.S. colleges and universities. Both groups often send money home to support family or pay for expenses.
Green-Card Applicants
Green-card applicants are people who have applied for permanent residency in the United States 🇺🇸 but have not yet received their green card. They are not citizens, so they may also be affected by the remittance tax if they send money abroad.
Other Non-Citizen Workers
This group includes people on other types of work visas, temporary protected status, or those with other forms of legal status who are not U.S. citizens. They, too, may face the remittance tax.
How Does the Remittance Tax Work?
The remittance tax is designed to be simple in theory but could be complicated in practice. Here’s how it works:
- A 1% tax is charged on any international money transfer over $15
- The tax is collected at the time of the transfer
- If the sender can prove U.S. citizenship, the tax does not apply
- If the sender cannot prove citizenship, the tax is charged, but they can apply for a refund later if they prove citizenship on their annual tax return
Proving Citizenship
To avoid the tax, senders must show proof of U.S. citizenship at the time of the transfer. This could mean showing a passport, birth certificate, or other official document. If the sender cannot provide proof right away, the tax will be collected, and the sender can later claim a refund when filing their annual income tax return.
Refund Process
If you are a U.S. citizen but could not prove it when sending money, you can request a refund when you file your taxes. You will need to show proof of citizenship and provide records of the taxed transfers. This process could take several months and may require extra paperwork.
Compliance for Financial Institutions
Banks and money transfer companies must check the citizenship status of anyone sending money abroad. They will need to keep detailed records and may need to ask for documents from customers. This could slow down transfers and make the process more complicated for everyone.
Why Was the Remittance Tax Proposed?
Lawmakers included the remittance tax in the OBBBA to raise money for other government programs. The tax is expected to generate billions of dollars each year by collecting a small fee from millions of international transfers. Supporters say the tax is a fair way to collect revenue from people who are not U.S. citizens but use the country’s financial system.
However, critics argue that the tax unfairly targets immigrants and non-citizen workers who often send money home to support families. They worry that the tax could make life harder for people who are already facing financial challenges.
Practical Implications for H-1B/F-1 Visa Holders and Green-Card Applicants
Increased Costs
For H-1B/F-1 visa holders and green-card applicants, the remittance tax means that sending money home will cost more. Even though the tax is now set at 1%, this can add up over time, especially for people who send money regularly.
Example:
If an H-1B visa holder sends $500 to their family in India 🇮🇳 every month, the 1% tax would be $5 per transfer, or $60 per year. For someone on a tight budget, this extra cost can be significant.
Extra Paperwork and Delays
Because financial institutions must check citizenship status, there may be more paperwork and longer wait times for transfers. People who cannot immediately prove their status may have to pay the tax and then wait months for a refund.
Uncertainty for Green-Card Applicants
Green-card applicants are in a gray area. They are not citizens, but they are on the path to permanent residency. It is not clear if they will be able to avoid the tax or if they will have to pay and then apply for a refund later. This uncertainty makes financial planning more difficult.
Impact on Families Abroad
Many H-1B/F-1 visa holders and green-card applicants send money to support family members in their home countries. The remittance tax could mean less money reaches those families, especially in countries where the U.S. dollar goes a long way.
Compliance Burden for Financial Institutions
Banks and money transfer companies are on the front lines of the remittance tax. They must:
- Verify the citizenship status of each sender
- Collect and remit the tax to the government
- Keep detailed records for audits
- Handle refund requests and customer questions
This extra work could lead to higher fees for all customers, not just non-citizens. Smaller money transfer companies may struggle to keep up with the new rules, which could reduce competition and make transfers more expensive.
Stakeholder Perspectives
Immigrant Communities
Immigrant groups have voiced strong concerns about the remittance tax. Many say it unfairly targets people who are working hard and supporting families both in the United States 🇺🇸 and abroad. The tax could discourage legal money transfers and push some people to use informal channels, which are less safe and harder to track.
Advocacy Groups
Organizations like American Citizens Abroad (ACA) are watching the bill closely. They warn that the tax could create confusion and hardship for both citizens and non-citizens. They also point out that the refund process could be slow and complicated, leaving people out of pocket for months.
Financial Industry
Banks and money transfer companies have raised alarms about the cost and complexity of the new rules. They worry about the burden of checking citizenship status and the risk of making mistakes. Some have warned that the tax could drive customers away or force smaller companies out of business.
Lawmakers
Supporters of the tax argue that it is a fair way to raise money and ensure that everyone using the U.S. financial system pays their share. They say the tax is small and will not hurt most people. Opponents argue that it is unfair and will hurt immigrants and their families.
Background: Remittances and the U.S. Economy
Remittances are a major part of the global economy. Each year, people in the United States 🇺🇸 send billions of dollars to family and friends in other countries. These transfers help pay for food, education, healthcare, and other essentials. For many families, remittances are a lifeline.
According to the World Bank, the United States 🇺🇸 is the largest source of remittances in the world. In 2023, people in the United States 🇺🇸 sent more than $70 billion abroad. Countries like Mexico 🇲🇽, India 🇮🇳, and the Philippines 🇵🇭 are among the top recipients.
A tax on remittances could have ripple effects, not just for senders and their families, but also for the economies of receiving countries. Some experts worry that the tax could reduce the amount of money sent abroad, hurting families and slowing economic growth in developing countries.
Future Outlook: What Happens Next?
The remittance tax is still being debated in Congress. The final version of the OBBBA could change before it becomes law. Lawmakers may adjust the tax rate, change who is affected, or add new rules to make the process easier.
Stakeholders—including advocacy groups, financial institutions, and immigrant communities—are lobbying for changes. Some want the tax removed entirely, while others are pushing for exemptions for certain groups, like green-card applicants or students.
As reported by VisaVerge.com, the ongoing negotiations mean that the future of the remittance tax is uncertain. People who may be affected should stay informed and be ready to adjust their financial plans if the tax becomes law.
What Should H-1B/F-1 Visa Holders and Green-Card Applicants Do Now?
If you are an H-1B/F-1 visa holder, green-card applicant, or other non-citizen worker, here are some steps you can take:
- Stay informed: Follow updates from official sources like the U.S. Treasury Department and advocacy groups.
- Keep good records: Save receipts and documents for all international money transfers.
- Ask your bank or money transfer company about their process for verifying citizenship status.
- Plan for possible extra costs: If the tax becomes law, budget for the extra 1% on transfers.
- If you become a U.S. citizen, keep proof handy to avoid the tax.
Key Takeaways
- The remittance tax in the OBBBA is currently set at 1% for international transfers over $15, unless the sender can prove U.S. citizenship.
- H-1B/F-1 visa holders, green-card applicants, and other non-citizen workers are likely to be affected.
- Financial institutions must verify citizenship status, which could lead to delays and extra paperwork.
- Senders who cannot prove citizenship at the time of transfer can apply for a refund when filing their annual tax return.
- The future of the tax is uncertain, as Congress continues to debate the OBBBA.
Conclusion
The proposed remittance tax in the OBBBA could have a big impact on H-1B/F-1 visa holders, green-card applicants, and other non-citizen workers in the United States 🇺🇸. While the tax rate has been lowered to 1%, the extra cost, paperwork, and uncertainty could make life harder for people who rely on remittances to support families abroad. Financial institutions will also face new challenges in verifying citizenship and handling refunds.
As the bill moves through Congress, it is important for affected individuals to stay informed, keep good records, and be ready for possible changes. For the latest updates, check official government sources and trusted advocacy groups. Analysis from VisaVerge.com suggests that the situation is still evolving, and the final rules may look different from what is currently proposed.
By understanding the possible effects of the remittance tax, H-1B/F-1 visa holders, green-card applicants, and other non-citizen workers can make better decisions about their finances and be prepared for whatever comes next.
Learn Today
Remittance Tax → A small fee on money sent internationally from the U.S., aimed at generating government revenue.
H-1B Visa → A U.S. work visa for skilled foreign workers in specialized jobs like technology or healthcare.
F-1 Visa → A visa allowing foreign students to study at U.S. colleges and universities.
Green-Card Applicant → A person who has applied for permanent residency in the U.S. but is not yet a citizen.
Citizenship Proof → Documents like passports or birth certificates that verify a person’s U.S. citizenship status.
This Article in a Nutshell
Congress is debating a 1% remittance tax on international transfers above $15, impacting H-1B/F-1 visa holders and green-card applicants. Financial institutions must verify citizenship, causing delays. This tax could increase costs for immigrant workers sending money home to support families, with uncertain future adjustments pending congressional decisions.
— By VisaVerge.com
