Guide
The 1% remittance tax from January 1, 2026, explained in plain numbers
Since January 1, 2026, a remittance funded with cash carries a 1% federal excise tax in the US. The same transfer funded from a bank account or by card carries $0 of this tax.
Tax by amount sent
Cash funding pays 1%. Bank account and card funding pay $0 at every amount.
The tax comes from Internal Revenue Code section 4475, created by the One Big Beautiful Bill Act signed on July 4, 2025. Providers collect it at the counter or at checkout. You do not file a separate form for a normal transfer.
What triggers it
- You hand over cash to fund the transfer.
- You pay with a money order or a cashier check.
- You use a similar physical payment instrument at an agent location.
What does not trigger it
- Funding from a US bank account, including ACH and bank wires.
- Paying with a US-issued debit card or credit card.
- Paying inside an app or on a website from a linked account.
What it costs
| Amount sent | Tax if cash-funded | Tax if bank or card funded |
|---|---|---|
| $300 | $3.00 | $0.00 |
| $500 | $5.00 | $0.00 |
| $1,000 | $10.00 | $0.00 |
| $2,500 | $25.00 | $0.00 |
There is no small-transfer exemption in the rule as published. A $50 cash transfer carries $0.50 of tax. Small, but the receipt should still show it.
Where to see it on your receipt
Look for a tax line in the pre-payment disclosure, before you confirm. Ria, for example, tells customers the amount appears under Total Tax. If a cash quote shows no tax line in 2026, ask why before you pay.
One trap: starting a transfer as card-funded, getting declined, then switching to cash. Providers should restart the disclosure so the tax appears. If the total jumps by exactly 1%, that is usually why.
FAQ
Does the tax depend on citizenship or immigration status?
No. It follows the funding method. Citizens, residents and visitors all pay it on cash-funded transfers and all avoid it with bank or card funding.
Can I get the federal tax back on my tax return?
No. Provider guidance states the federal remittance tax is not refundable and is not credited on a federal return. Some state charges are treated differently, for example in Oklahoma.
Who sends the tax to the IRS?
The provider. Providers deposit it semi-monthly and report quarterly on Form 720. You pay at the point of transfer.