How Immigrants in the US Can Legally Avoid the New 1% Remittance Tax

The United States has introduced a new excise tax on certain international money transfers, imposing a 1 percent charge on cash, money order, and cashier’s cheque remittances. 

The tax, effective from 1 January 2026, aims to regulate remittance flows while generating revenue for the government. Initially proposed at 5 percent, the tax was revised through legislative negotiations, ultimately settling at 1 percent. A similar levy was set to begin for remittances to India on 1 January 2025, indicating a broader effort to oversee remittance practices.

The tax applies to transfers made in cash or through money orders, with an additional $10 charge for every $1,000 sent. The recipient will still receive the full amount, with the sender responsible for the tax payment. Transfers made through banks, credit unions, or digital payment services like Google Pay or Apple Pay are exempt from the charge.

The groups most likely to be affected by the tax include immigrants, particularly non-resident Indians, foreign workers on H-1B visas, and international students, many of whom regularly send money home. Those who rely on cash transfers may face additional costs unless they switch to exempt methods such as bank transfers or digital payment systems.