Money & Movement: The new US 1% transfer tax — and the simple way around it
Since January, cash remittances out of the US carry a 1% federal tax. Digital and card-funded transfers do not.
A 1% federal excise tax on remittances took effect January 1, 2026 under the One Big Beautiful Bill Act, and the Treasury and IRS issued proposed regulations on April 11 clarifying how it works. The detail that matters for senders: the tax applies only to transfers funded with cash, a money order, or a cashier’s check handed over in person. Transfers paid from a bank account or with a US debit or credit card — and app-based digital transfers — are exempt.
The takeaway is practical. For anyone supporting family across the Caribbean or Africa, funding a transfer digitally or by card rather than with cash avoids the surcharge entirely. On a US$1,000 cash transfer the tax is US$10; on the same amount paid by card or bank, it is zero. TWB’s sending-money guide tracks live corridor options and fees at /practical/sending-money/.
Sources: IRS, Treasury proposed regulations (April 11, 2026); Tax Notes (January 2026).