The One Big Beautiful Bill Act, signed July 4, 2025 and effective January 1, 2026, introduced a 1% federal excise tax on remittance transfers funded with cash from the United States. This calculator tells you exactly whether your transfer is taxable and how much the 1% costs, based on your funding method.
Select how you are funding your transfer: cash, money order, cashier's check (taxable), or bank account, debit/credit card, or crypto (exempt).
Enter your transfer amount.
The calculator applies the 1% rate only if your funding method is taxable and shows the exact tax owed, plus how to restructure your payment method to avoid it.
The tax rate is a flat 1% (TAX_RATE = 0.01) applied to the transfer amount, but only when the funding method is cash, a money order, or a cashier's check.
Tax owed = transfer amount × 0.01, when taxable; $0 when the funding method is bank account, debit/credit card, or cryptocurrency, since those methods are statutorily exempt.
The sender pays the tax at the time of transaction; the remittance transfer provider (Western Union, MoneyGram, etc.) collects it and remits it to the IRS. The recipient is unaffected.
A $1,000 transfer funded with cash at a money-transfer agent owes $10 in federal excise tax (1% of $1,000). The identical $1,000 transfer funded from a bank account, debit card, or via crypto rails owes $0 — the tax applies to the funding method, not the transfer itself.
The One Big Beautiful Bill Act, signed July 4, 2025, introduced a 1% federal excise tax on remittance transfers sent from the US to foreign countries. It took effect January 1, 2026. The tax applies only to cash-funded transfers — cash, money orders, and cashier's checks. Bank account transfers, debit/credit card payments, and crypto transfers are exempt.
The simplest way is to fund your transfer with a bank account, debit card, credit card, or cryptocurrency instead of cash. The tax only applies to cash-funded methods: physical cash, money orders, and cashier's checks. Switching to a digital payment method makes your transfer 100% exempt.
The sender pays the tax at the time of transaction. The remittance transfer provider (Western Union, MoneyGram, etc.) collects the tax and remits it to the IRS. Your recipient is not affected — they receive the full transfer amount minus any provider fees.
No. The tax only applies to cash-funded transfers through remittance transfer providers. If you use Wise funded via bank account, or send money through crypto rails (Stellar, Solana, etc.), or use a debit/credit card, your transfer is exempt from the 1% excise tax.
The IRS has announced initial penalty relief during the rollout period. However, the remittance transfer provider is responsible for collecting the tax at time of transaction, so in most cases you will pay it automatically when funding with cash. Attempting to structure transactions to avoid the tax is not recommended. Learn more at the IRS remittance tax guidance page.
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