New 25% tax on remittances hits immigrant families hardest
H.R. 8995 — REMITTANCE Act · Filed by Chip Roy (R-TX) · Introduced May 21, 2026 · Referred to committee
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What it does
This bill raises the federal excise tax on remittance transfers (money sent abroad) from its current rate to 25 percent, removes caps on that tax, and creates a refundable tax credit allowing U.S. citizens to reclaim the excise tax they pay on remittances for business or travel purposes. The revenue from the tax goes to deficit reduction, but citizens who send money abroad for qualifying reasons get the tax back.
Why we flagged it
The bill's core mechanism is a 25% excise tax on remittance transfers with a refundable credit carved out for citizens sending money for business or travel. This creates a targeted tax increase on a specific financial activity (remittances) paired with a partial exemption for certain purposes, making it a hybrid revenue/relief measure rather than a straightforward tax or subsidy.
What the text implies
- The refundable credit is limited to 'citizens of the US' and requires the sender to certify the purpose (business or travel), creating a compliance burden and potential for disputes over what qualifies—non-citizens sending remittances receive no credit and bear the full 25% tax.
- The bill does not define 'business or travel purposes' with precision, leaving the Secretary of the Treasury to issue regulations; this regulatory discretion may create uncertainty about which remittances qualify for the credit and could lead to inconsistent application.
The full analysis lists 5 implications of this text.
Who stands to gain
U.S. Treasury (deficit reduction); Remittance transfer providers (may pass tax to consumers or absorb as cost)