New US tax proposal includes 5% remittance fee for non-citizens

A major tax package backed by President Donald Trump cleared a key hurdle this week, as the House Ways and Means Committee advanced the president’s “big, beautiful bill” — a 389-page legislative proposal that includes a 5% excise tax on remittance transfers sent by individuals who are not verified U.S. citizens.

The committee voted to move the legislation forward, retaining the remittance tax provision, among others. The proposal now heads to the House Budget Committee, which will consolidate it into a single legislative package for consideration by the full House of Representatives.

According to Section 112105 of the bill, the 5% excise tax would be imposed on remittance transfers and paid by the sender. Remittance transfer providers would be responsible for collecting the tax and remitting it quarterly to the Secretary of the Treasury. If the tax is not collected at the time of the transfer, providers bear secondary liability for the unpaid amount.

There is an exception for transfers sent by verified U.S. citizens or U.S. nationals, but only if the transaction is completed through a qualified remittance transfer provider — defined as a provider that has entered into a written agreement with the Treasury Department to verify senders’ citizenship or nationality. The provision also includes a refundable tax credit for taxpayers with valid Social Security numbers, and features an anti-conduit rule to prevent abuse of the system.

Impact on remittances in the Caribbean

If enacted, the remittance tax could have a direct impact on Caribbean countries, where money sent from relatives in the United States is a vital source of income and foreign exchange. Caribbean nationals living in the U.S. — particularly those who are not U.S. citizens or nationals — would face an added 5% cost on each money transfer, unless they use a qualified provider and can verify their status. For families back home, this could mean receiving less money overall, and for undocumented or mixed-status households, the policy may discourage formal remittance transfers altogether.