The United States began taxing certain outbound money transfers on 1 January 2026. Our remittance hub states the rule; this page does the thing the hub does not: it names the instrument, quotes it, and then tests it against what each major provider actually publishes about how you are allowed to pay.
In short: The tax is Internal Revenue Code section 4475, added by section 70604(a) of Public Law 119-21 (139 Stat. 285, signed 4 July 2025). It is 1 percent, it applies to transfers made after 31 December 2025, and by its own terms it reaches only transfers where the sender hands the company cash, a money order, a cashier’s check, or a similar physical instrument. Transfers funded from a qualifying financial-institution account, or with a debit or credit card issued in the United States, are outside it. The trigger is the instrument the sender provides — not the country, not the amount, not how the family collects. Final regulations do not exist: as of 11 August 2026 there is one Federal Register document, a proposed rule.
The statute, subsection by subsection
Every quotation below is from 26 U.S.C. § 4475, retrieved from the Legal Information Institute’s U.S. Code text on 2026-08-11.
| Provision | What it says (quoted) |
|---|---|
| § 4475(a) — imposition | “There is hereby imposed on any remittance transfer a tax equal to 1 percent of the amount of such transfer.” |
| § 4475(b)(1) — who owes it | “The tax imposed by this section with respect to any remittance transfer shall be paid by the sender with respect to such transfer.” |
| § 4475(b)(2) — who collects it | The provider “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.” |
| § 4475(b)(3) — if it is not collected | “Where any tax imposed by subsection (a) is not paid at the time the transfer is made… such tax shall be paid by the remittance transfer provider.” |
| § 4475(c) — the trigger | “The tax imposed under subsection (a) 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.” |
| § 4475(d) — the carve-outs | The tax “shall not apply” where the funds are “(1) withdrawn from an account held in or by a financial institution… described in subparagraphs (A) through (H) of section 5312(a)(2) of title 31… and subject to the requirements under subchapter II of chapter 53,” or “(2) funded with a debit card or a credit card which is issued in the United States.” |
| § 4475(e) — definitions | “Remittance transfer,” “remittance transfer provider” and “sender” take their meanings from section 919(g) of the Electronic Fund Transfer Act (15 U.S.C. 1693o-1(g)). “Credit card” comes from EFTA § 920(c)(3); “debit card” from EFTA § 920(c)(2), “without regard to subparagraph (B) of such section.” |
| § 4475(f) — anti-conduit | “For purposes of section 7701(l), with respect to any multiple-party arrangements involving the sender, a remittance transfer shall be treated as a financing transaction.” |
| Effective date — § 70604(c) | “The amendments made by this section shall apply to transfers made after December 31, 2025.” (139 Stat. 286.) |
That last definitional clause matters. The IRS and Treasury explain in the proposed rule that EFTA § 920(c)(2)(B) is the paragraph “which provides that the term ‘debit card’ includes a general-use prepaid card” — so § 4475 borrows the debit-card definition with the prepaid-card sentence switched off.
What the proposed regulations add
The only rulemaking on this tax is a Notice of Proposed Rulemaking, REG-114499-25 (RIN 1545-BR98), published in the Federal Register on 13 April 2026. Comments closed 12 June 2026. A Federal Register document search run on 2026-08-11 for excise-tax documents on remittance transfers published since 1 January 2026 returned that document and no other — there is no final rule. The proposed applicability date is “calendar quarters beginning on or after the date these regulations are published as final regulations.”
| Point | What the proposed rule says |
|---|---|
| Traveler’s checks | Added to the taxable list. They “are virtually indistinguishable from money orders and cashier’s checks and are, therefore, a ‘similar physical instrument.’” |
| Personal and business checks | Not taxable instruments. Treasury and the IRS “determined that ACH transfers, general-use prepaid cards, and personal and business checks are not ‘similar physical instruments’ that trigger the tax.” |
| A check cashed at the counter | Treated as cash. “If a remittance transfer provider or its agent cashes a check payable to the sender and some, or all, of the cash is used to fund a remittance transfer, then the remittance transfer is treated as being funded with cash… it does not matter whether the sender is charged a separate check-cashing fee.” |
| The tax base | “The amount that will ultimately be transferred to the designated recipient.” Service fees, State taxes and the remittance tax itself are excluded from the base; promotional bonuses that reach the recipient are included. |
| Small transfers | Excluded: “Transfer amounts, as described in 12 CFR 1005.31(b)(1)(i)… of $15.00 or less.” |
| Filing mechanics | Form 720, Quarterly Federal Excise Tax Return, plus semimonthly deposits under 26 CFR 40.6302(c)-1(a)(1). |
| Penalty relief | Notice 2025-55, 2025-43 I.R.B. 625 (20 October 2025), gave relief from failure-to-deposit penalties “for the first three calendar quarters of 2026.” |
| Anti-avoidance | Cash swapped for a prepaid card and then immediately used to fund a transfer “may be recharacterized as a remittance transfer in which the sender provided cash.” |
| Small-provider safe harbour | Rejected. The Regulation E safe harbour at 12 CFR 1005.30(f)(2) — the 500-transfers-a-year threshold — does not carry over. |
The tracker: what each provider publishes about funding
Because the trigger is the instrument the sender provides, the practically useful question is not “which company is cheapest” but which funding methods a company actually offers you at the moment of payment. Below is what each provider’s own published page said on 2026-08-11. Each row is that company’s disclosure — not our interpretation of its tax position.
| Provider | Funding methods it publishes for a U.S. sender | Cash accepted from the sender? | Source page (retrieved 2026-08-11) |
|---|---|---|---|
| Wise | Bank debit (ACH), ACH bank transfer, wire transfer, debit/credit card, Wise balance | No — “You can’t pay for your transfer with bill payments, cash, or checks.” | wise.com/help/articles/2932150/guide-to-usd-transfers |
| Remitly | Apple Pay; bank account (U.S., Canada, U.K.); Google Pay; prepaid cards; Discover cards (U.S.); Visa and Mastercard debit or credit | Not listed — no cash, money order or cashier’s check appears on the published list | remitly.com/us/en/help/article/paying-for-your-transfer |
| Xoom | “Conveniently pay with PayPal, bank account, credit card, or debit card” | No — the same page states “we don’t accept cash or any of the affected payment methods” | xoom.com/guatemala/send-money |
| Ria | United States row of Ria’s online and in-app payment-options table: credit card, debit card, ACH, Apple Pay, Google Pay | Not listed for the U.S. in that table — the same table lists “Cash” for Chile, so it can carry that value; it does not appear in the U.S. row. The article covers app and website payments only and does not describe agent counters | help.riamoneytransfer.com/hc/en-us/articles/7907355982097 |
| MoneyGram | Online: credit or debit card (Visa, MasterCard); Bank Account payment “directly from your U.S. checking or savings account,” 3-Day Standard ACH via Plaid | Yes — “Send in person with cash”; and “Start online, pay in person… choose ‘Cash at a location.’ Then visit a MoneyGram location near you within 24 hours to pay.” | moneygram.com/us/en/help-center/faq/send-receive/payment-methods and …/send-and-receive/money-transfers-in-person |
| Western Union | Online: “Send money online securely with your bank account, credit, or debit card”; also “start a transfer and pay in store” at agent locations | In-store payment is offered; the instrument is not itemised on the published page | westernunion.com/us/en/send-money.html |
| Intermex | “Use your bank account, debit, or credit card for your first transfer” | Not itemised for wires. Cash payment is published for phone top-ups (“the flexibility of paying in cash in our Agent locations”) and bill pay (“Pay your bills with cash or a check”), not for money transfers | intermexonline.com/en/how-it-works |
Read the table as a disclosure map, not a tax opinion. Four of the seven providers do not publish cash as a way for a U.S. sender to pay. Two publish an in-person channel without naming the instrument. Only MoneyGram publishes both halves plainly. Two of the four — Wise and Xoom — say so in words rather than by omission; where a row instead says “not listed,” that is what the company published, not a finding that cash is unavailable at every counter that carries its brand.
One provider addresses § 4475 by name. The same Xoom page cited above carries the question “Are my transactions impacted by the 1% remittance tax in the United States?” and answers: “No, Xoom transfers are not subject to this tax.” It continues: “As part of the One Big Beautiful Bill Act, a new 1% tax on certain remittance transfers from the United States will take effect on January 1, 2026. However, Xoom is a digital PayPal service and we don’t accept cash or any of the affected payment methods.” (Retrieved 2026-08-11.) That is Xoom’s own statement about Xoom, reproduced here because it is published; this page does not evaluate any company’s tax position, and none of the other six providers published a § 4475 statement on the pages retrieved.
Edge cases the instruments do not settle
- Mobile wallets. Apple Pay and Google Pay appear on Remitly’s and Ria’s published lists. The words “wallet,” “Apple Pay” and “Google Pay” do not appear anywhere in § 4475 or in the 13 April 2026 proposed regulations — searched in full on 2026-08-11. No published figure or rule was found addressing how a tokenised card in a mobile wallet is characterised under § 4475(d)(2).
- Prepaid cards. § 4475(e)(3) borrows the EFTA debit-card definition “without regard to subparagraph (B),” the sentence that folds general-use prepaid cards into “debit card.” The proposed rule nevertheless keeps prepaid cards off the taxable-instrument list, while giving an anti-avoidance example in which cash converted to a prepaid card and spent immediately is recharacterised as cash. Both statements are from proposed, not final, regulations.
- Guatemala-corridor collections. No published figure was found for how much § 4475 tax has been collected on U.S.–Guatemala transfers. The instrument that would report it — the IRS Form 720 excise-tax series — is not broken out by destination country.
- Guatemalan tax. § 4475 is a United States excise tax collected by the IRS. It is not administered by SAT, Guatemala’s tax authority, and it is not a Banco de Guatemala measure. No Guatemalan instrument imposing a parallel charge on incoming remittances was found as of 2026-08-11.
Where this sits with the rest of the site
- Remittances hub — the live cost comparison across providers.
- Sending money USA to Guatemala — the corridor page.
- Bank deposit vs cash pickup — payout side, which § 4475 does not turn on.
- USD/GTQ annual average — the yearly series U.S. filers ask for, and which authority publishes what.
- Opening a USD account from the USA.
This page reports the published rule and each company’s published disclosure. It is not tax advice, and it does not tell any reader how to fund a transfer. For your own situation, consult a qualified tax professional.
Sources
| Instrument | Publishing body | URL | Retrieved |
|---|---|---|---|
| 26 U.S.C. § 4475, Imposition of tax (full text and effective-date note) | Office of the Law Revision Counsel, via Cornell Legal Information Institute | https://www.law.cornell.edu/uscode/text/26/4475 | 2026-08-11 |
| Public Law 119-21, title VII, § 70604(a) and (c), 139 Stat. 285-286 (4 July 2025) | United States Congress (as cited in the § 4475 credit and effective-date note) | https://www.law.cornell.edu/uscode/text/26/4475 | 2026-08-11 |
| Excise Tax on Remittance Transfers, Notice of Proposed Rulemaking, REG-114499-25, RIN 1545-BR98 (13 April 2026) | Internal Revenue Service and Department of the Treasury | https://www.govinfo.gov/content/pkg/FR-2026-04-13/html/2026-07085.htm | 2026-08-11 |
| Federal Register document search, excise tax on remittance transfers, published on or after 2026-01-01 (one result: the proposed rule) | Office of the Federal Register | https://www.federalregister.gov/documents/2026/04/13/2026-07085/excise-tax-on-remittance-transfers | 2026-08-11 |
| Notice 2025-55, 2025-43 I.R.B. 625 (20 October 2025), failure-to-deposit penalty relief | Internal Revenue Service (as described in REG-114499-25) | https://www.irs.gov/pub/irs-drop/n-25-55.pdf | 2026-08-11 |
| Guide to USD transfers (accepted and refused payment methods) | Wise | https://wise.com/help/articles/2932150/guide-to-usd-transfers | 2026-08-11 |
| How can I pay for my transfer? (list of supported payment methods) | Remitly | https://www.remitly.com/us/en/help/article/paying-for-your-transfer | 2026-08-11 |
| Send money to Guatemala (payment step, and the company’s own 1% remittance-tax FAQ) | Xoom | https://www.xoom.com/guatemala/send-money | 2026-08-11 |
| What are my payment options online? (country-by-country payment table) | Ria Money Transfer | https://help.riamoneytransfer.com/hc/en-us/articles/7907355982097-What-are-my-payment-options-online | 2026-08-11 |
| Payment methods FAQ (United States) | MoneyGram | https://www.moneygram.com/us/en/help-center/faq/send-receive/payment-methods | 2026-08-11 |
| Send money in person | MoneyGram | https://www.moneygram.com/us/en/send-and-receive/money-transfers-in-person | 2026-08-11 |
| Send money online (funding methods and pay-in-store) | Western Union | https://www.westernunion.com/us/en/send-money.html | 2026-08-11 |
| Products / how it works (first-transfer funding methods) | Intermex | https://www.intermexonline.com/en/how-it-works | 2026-08-11 |
Xoom’s own help-centre payment-methods article at help.xoom.com is a JavaScript application that returned no readable content through a direct request or a text proxy on 2026-08-11; the Guatemala corridor page is cited instead. That is a retrieval failure on one page, not a finding that Xoom publishes nothing.
