What we verified in “Sending money abroad and the remittance tax”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. Under federal law (26 U.S.C. §4475(a)), a tax is imposed on any remittance transfer equal to 1 percent of the amount of the transfer; under the law's effective-date note, it applies to transfers made after December 31, 2025.

   Sources 1 · 26 U.S.C. §4475(a): 'There is hereby imposed on any remittance transfer a tax equal to 1 percent of the amount of such transfer'; note 'Effective Date' (Pub. L. 119-21, §70604(c)): 'shall apply to transfers made after December 31, 2025' · Checked October 17, 2026

2. Under federal law (26 U.S.C. §4475(b)), the tax is paid by the sender; the remittance transfer provider collects it from the sender and remits it to the Treasury quarterly; and if the tax is not paid at the time of the transfer, to the extent it is not collected, the provider must pay it.

   Sources 1 · 26 U.S.C. §4475(b)(1)–(3): 'shall be paid by the sender with respect to such transfer'; 'shall collect the amount of the tax imposed under subsection (a) with respect to such transfer from the sender and remit such tax quarterly to the Secretary'; 'Where any tax imposed by subsection (a) is not paid at the time the transfer is made, then to the extent that such tax is not collected, such tax shall be paid by the remittance transfer provider' · Checked October 17, 2026

3. Under federal law (26 U.S.C. §4475(c)), the tax applies only to remittance transfers for which the sender gives the provider cash, a money order, a cashier's check or any other similar physical instrument, as determined by the Treasury.

   Sources 1 · 26 U.S.C. §4475(c) 'Tax limited to cash and similar instruments': 'shall apply only to any remittance transfer for which the sender provides cash, a money order, a cashier's check, or any other similar physical instrument (as determined by the Secretary) to the remittance transfer provider' · Checked October 17, 2026

4. Under federal law (26 U.S.C. §4475(d)), the tax does not apply to transfers whose funds are withdrawn from an account held in or by a financial institution described in subparagraphs (A) through (H) of 31 U.S.C. §5312(a)(2) that is subject to the Bank Secrecy Act requirements, or that are funded with a debit card or credit card issued in the United States.

   Sources 1 · 26 U.S.C. §4475(d) 'Nonapplication to certain noncash remittance transfers': 'withdrawn from an account held in or by a financial institution'; 'which is described in subparagraphs (A) through (H) of section 5312(a)(2) of title 31'; 'funded with a debit card or a credit card which is issued in the United States' · Checked October 17, 2026

5. Under federal law (31 U.S.C. §5312(a)(2)), the financial institutions in subparagraphs (A) through (H) include insured banks, commercial banks or trust companies, agencies or branches of foreign banks in the United States, any credit union and thrift institutions.

   Sources 2 · 31 U.S.C. §5312(a)(2)(A)–(F): 'an insured bank'; 'a commercial bank or trust company'; 'an agency or branch of a foreign bank in the United States'; 'any credit union'; 'a thrift institution' · Checked October 17, 2026

6. Under federal law (26 U.S.C. §4475(e)–(f)), the terms 'remittance transfer', 'remittance transfer provider' and 'sender' have the meanings given in section 919(g) of the Electronic Fund Transfer Act; and for multiple-party arrangements involving the sender, a remittance transfer is treated as a financing transaction for purposes of section 7701(l) of the tax code.

   Sources 1 · 26 U.S.C. §4475(e)(1): 'shall each have the respective meanings given such terms by section 919(g) of the Electronic Fund Transfer Act'; (f) 'Application of anti-conduit rules': 'with respect to any multiple-party arrangements involving the sender, a remittance transfer shall be treated as a financing transaction' · Checked October 17, 2026

7. According to the IRS, beginning January 1, 2026 the remittance transfer tax applies to remittances sent from the United States to recipients in foreign countries when the sender gives the provider cash, a money order, a cashier's check or another similar physical instrument; the sender is liable for the tax, and if the provider does not collect it, the tax becomes the provider's liability.

   Sources 3 · IR-2026-48, April 10, 2026: 'Beginning Jan. 1, 2026, a 1% remittance transfer tax applies to remittances sent from the United States to recipients in foreign countries when the sender provides cash, a money order, a cashier's check, or other similar physical instrument to the remittance transfer provider'; 'The sender is liable for the tax'; 'If the remittance transfer provider does not collect the tax from the sender, the tax becomes a liability of the remittance transfer provider' · Checked October 17, 2026

8. According to the IRS, the Treasury and the IRS issued proposed regulations, which are not final, with rules and definitions for the remittance transfer tax, including the amount on which the tax is imposed and the scope of physical instruments that trigger it; public comments were due by June 12, 2026.

   Sources 3 · IR-2026-48: 'issued proposed regulations that would provide rules and definitions related to the new excise tax imposed on certain remittance transfers'; 'specifying the amount on which the remittance transfer tax is imposed'; 'determining the full scope of physical instruments that trigger the tax'; 'Comments on the proposed regulations are due by June 12, 2026' · Checked October 17, 2026 · Proposed, not in force

9. According to IRS Notice 2025-55, section 4475 imposes a 1 percent tax on the amount of certain remittance transfers made after December 31, 2025, the tax is paid by the sender, and taxes in that chapter are reported on Form 720, Quarterly Federal Excise Tax Return.

   Sources 4 · Notice 2025-55, Section 2 'Background': 'Section 4475 imposes a 1 percent tax on the amount of certain remittance transfers that occur after December 31, 2025'; 'the remittance transfer tax is paid by the sender'; 'Chapter 36 taxes are reported on Form 720, Quarterly Federal Excise Tax Return' · Checked October 17, 2026

10. According to the CFPB, federal law defines remittance transfers as electronic transfers of more than $15 sent by consumers in the United States to people or companies in foreign countries through a remittance transfer provider; banks and other financial companies may qualify as providers, but a company is not a provider if it made 500 or fewer transfers in the prior year and makes 500 or fewer in the current year, and then federal law does not require it to give you these protections; the provider must tell you the fees and taxes it collects, the exchange rate, the amount expected to be delivered and, if applicable, that foreign taxes and fees may be deducted; it generally must use your language on receipts and disclosures if it uses that language in its advertising where you send or if the transfer was made in your language; you have up to 30 minutes after paying to cancel at no charge unless the money was already picked up or deposited; you have 180 days from the availability date to report a mistake; providers generally have 90 days to investigate; for some errors, such as money that never arrives, you may get a refund or have the transfer resent; and other protections may apply depending on how you send money and your state's laws.

    Sources 5 · What is a remittance transfer and what are my rights? (last reviewed Oct 03, 2024): 'electronic transfers of more than $15, sent by consumers in the United States to people or companies in foreign countries through a remittance transfer provider'; 'Banks and other types of financial services companies may qualify'; 'A company is not a remittance transfer provider if it provided 500 or fewer remittance transfers in the prior calendar year and provides 500 or fewer transfers in the current calendar year'; 'then federal law does not require them to provide you with the protections you would otherwise get under federal law'; 'Fees and taxes they collect from you'; 'The exchange rate that applies to the transfer, if applicable'; 'The amount of money expected to be delivered'; 'a statement that additional foreign taxes and fees may be deducted from the remittance transfer'; 'Federal law generally requires remittance transfer providers to use your language on receipts and other disclosures if it uses your language in its advertising, sales, or marketing materials where you made the transfer, or if it made the transfer in your language'; 'After paying, you have up to 30 minutes to cancel the remittance transfer at no charge, unless the transfer has already been picked up or deposited into the recipient's account'; 'You have 180 days to notify the remittance provider of a mistake, starting from the date disclosed by the remittance transfer provider as the date when the money will be available'; 'Remittance transfer providers generally have 90 days to investigate the matter'; 'For certain types of errors, such as if the money never arrives, you may be able to get a refund or have the transfer resent'; 'Other protections may be available to you, depending on how you send the money and the laws in your state' · Checked October 17, 2026

11. Under Regulation E, before you pay the provider must give you a disclosure with the amount transferred ('Transfer Amount'), the fees it imposes and the taxes it collects on the transfer ('Transfer Fees' and 'Transfer Taxes'), the total ('Total') and the exchange rate it uses ('Exchange Rate'), using those or substantially similar terms, among other items; when you pay, a receipt with that information plus the date funds will be available abroad and a statement of your error-resolution and cancellation rights; and disclosures are given in English and, where applicable, in the foreign languages the provider principally uses to advertise transfers at the office where you send.

    Sources 6 · 12 CFR §1005.31(b)(1)(i)–(iv): 'The amount that will be transferred to the designated recipient'; 'Transfer Amount'; 'Any fees imposed and any taxes collected on the remittance transfer by the provider'; 'Transfer Fees'; 'Transfer Taxes'; 'The total amount of the transaction'; 'The exchange rate used by the provider for the remittance transfer'; 'Exchange Rate'; (b)(2)(ii) and (iv): 'The date in the foreign country on which funds will be available to the designated recipient'; 'A statement about the rights of the sender regarding the resolution of errors and cancellation'; (e)(1)–(2): 'must be provided to the sender when the sender requests the remittance transfer, but prior to payment for the transfer'; 'a receipt required by paragraph (b)(2) of this section generally must be provided to the sender when payment is made for the remittance transfer'; (g)(1)(i): 'Each of the foreign languages principally used by the remittance transfer provider to advertise, solicit, or market remittance transfer services' · Checked October 17, 2026

12. Under Regulation E, if you ask to cancel no later than 30 minutes after paying, with enough information to identify you and the transfer, and the funds have not been picked up or deposited into the recipient's account, the provider must refund at no additional cost the total you paid, including fees and, to the extent not prohibited by law, taxes, within three business days of your request.

    Sources 7 · 12 CFR §1005.34(a)–(b): 'no later than 30 minutes after the sender makes payment in connection with the remittance transfer'; 'The transferred funds have not been picked up by the designated recipient or deposited into an account of the designated recipient'; 'shall refund, at no additional cost to the sender, the total amount of funds provided by the sender in connection with a remittance transfer, including any fees and, to the extent not prohibited by law, taxes imposed in connection with the remittance transfer, within three business days of receiving a sender's request to cancel the remittance transfer' · Checked October 17, 2026

13. According to the CFPB, to cancel you must give enough information for the provider to find the transfer; if you scheduled the transfer in advance, you may cancel up to three business days before it is made; and in some cases state law or the provider's own rules give you more time.

    Sources 8 · Can I cancel an international money transfer? (last reviewed Oct 03, 2024): 'You gave enough information for your provider to find the particular transfer to be canceled'; 'If you scheduled the transfer in advance, you may cancel the transfer up to three business days before it is made'; 'In some cases, state law or the transfer provider's own rules may give you more time to cancel a transaction' · Checked October 17, 2026

14. Under Regulation E, the provider must handle an oral or written notice of error it receives no later than 180 days after the disclosed availability date; it must investigate and determine whether an error occurred within 90 days of receiving the notice, and report the results within three business days after completing the investigation.

    Sources 9 · 12 CFR §1005.33(b)(1)(i): 'no later than 180 days after the disclosed date of availability of the remittance transfer'; (c)(1): 'shall investigate promptly and determine whether an error occurred within 90 days of receiving a notice of error'; 'within three business days after completing its investigation' · Checked October 17, 2026

15. According to the CFPB, if you think there was a mistake contact the provider right away, and it may help to follow up in writing with your name and phone number or address, the recipient's, and the amount; errors the provider must correct include delivering the wrong amount, failing to deliver the funds on time or at all, and delivering them to the wrong recipient; if the mistake happened because you gave a wrong account or routing number and the provider took certain steps, it does not have to refund or resend the money; some banks and credit unions are exempt from the federal error protections; the receipt must list the provider's and the CFPB's phone numbers and websites; if you are not satisfied, you can submit a complaint to the CFPB; and for your state's laws you can contact your state attorney general or financial regulator.

    Sources 10 · How do I notify the remittance transfer provider about a mistake with my money transfer? (last reviewed Oct 03, 2024): 'It may also be helpful to follow up with a written error notice'; 'Your name and telephone number or address'; 'The dollar amount of the transfer'; 'Failure to deliver funds by the date that the money is supposed to be available or to deliver the funds at all'; 'Delivery of funds to the wrong recipient'; 'If the mistake occurred because you gave the remittance transfer provider an incorrect account number or routing number and the provider took certain actions, then they're not required to refund or resend the money'; 'Some banks and credit unions are exempt from the federal requirement to provide error protections'; 'A remittance transfer receipt must list the remittance transfer provider's phone number and website, a phone number and website for the CFPB'; 'If you're not satisfied with the company's response, you can submit a complaint to the CFPB'; 'Contact your state attorney general or state financial regulator for more information about your state's laws' · Checked October 17, 2026

16. According to the IRS, the VITA and TCE programs offer free basic tax return preparation to qualified individuals, including limited English-speaking taxpayers.

    Sources 11 · Free tax return preparation for qualifying taxpayers (IRS): 'offer free basic tax return preparation to qualified individuals'; 'Limited English-speaking taxpayers' · Checked October 17, 2026

17. According to the FDIC, many banks let you open an account even if you are not a U.S. citizen, and you might need different forms of identification, such as a foreign passport, a consular ID or an Individual Taxpayer Identification Number (ITIN).

    Sources 12 · GetBanked (FDIC), FAQ: 'Yes, many banks allow you to open an account even if you're not a U.S. citizen'; 'You might need different forms of identification, like a foreign passport, a consular ID, or Individual Taxpayer Identification Number (ITIN)' · Checked October 17, 2026