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. A Federal Register search on 9 November 2026 (term “remittance transfer”, documents published since 1 January 2026) returns no final rule: its only § 4475 document is a proposed rule.
Does the tax apply to Pangea, Xoom, Wise, Remitly, Ria, MoneyGram, Western Union or Intermex?
Under § 4475 the answer turns on how you pay the provider, not on the brand: the tax reaches only transfers the sender funds with cash, a money order, a cashier’s check or a similar physical instrument (§ 4475(c)), and excludes transfers funded with a U.S.-issued debit or credit card or from a qualifying account (§ 4475(d)). The table shows what each company publishes on its own pages, all checked on 9 November 2026.
| Provider | What the provider publishes about the 1% tax | Cash, money order or cashier’s check published as a way to pay? | Page checked (2026-11-09) |
|---|---|---|---|
| Pangea | “That means that when you fund your transfers using these methods with Pangea, the 1% remittance tax will not apply” — the methods named are a U.S. bank account, a U.S. debit card (excluding general-use prepaid cards) or a U.S. credit card. Blog post dated 29 January 2026 | Not listed. Payment methods are Debit Card, Credit Card and Bank Account, with Bank Account “limited to Mexico and Philippines transfers”; for Guatemala that leaves U.S.-issued Visa and Mastercard debit and credit cards | pangeamoneytransfer.com/blog/remittance-tax and pangeamoneytransfer.com/help |
| Xoom | “No, Xoom transfers are not subject to this tax” | No — “we don’t accept cash or any of the affected payment methods” | xoom.com/guatemala/send-money |
| Wise | Wise does not publish a statement on the tax on its USD-transfer guide | No — “You can’t pay for your transfer with bill payments, cash, or checks.” | wise.com/help/articles/2932150/guide-to-usd-transfers |
| Remitly | Remitly does not publish a statement on the tax on its payment-methods article | Not listed | remitly.com/us/en/help/article/paying-for-your-transfer |
| Ria | Ria does not publish a statement on the tax on its online payment-options article | Not listed for the U.S. (the article covers app and website payments only) | help.riamoneytransfer.com/hc/en-us/articles/7907355982097 |
| MoneyGram | MoneyGram does not publish a statement on the tax on its payment-methods FAQ or its send-in-person page | Yes — “Send money in person with cash, no bank account needed” | moneygram.com/us/en/send-and-receive/money-transfers-in-person |
| Western Union | Western Union does not publish a statement on the tax on its send-money page | In-store payment is offered; the instrument is not itemised | westernunion.com/us/en/send-money.html |
| Intermex | Intermex does not publish a statement on the tax on its how-it-works page | Not itemised for money transfers | intermexonline.com/en/how-it-works |
Reading the Pangea row against the statute: a Pangea transfer to Guatemala is paid with a U.S.-issued debit or credit card, which is the § 4475(d)(2) exclusion, and Pangea lists no cash-type way to pay. Pangea’s own statement says the same and carves out general-use prepaid cards (see the prepaid-card edge case below). For a provider that does take cash at a counter, the same company can be taxed on one transfer and not on the next, depending only on what the sender hands over. The detail behind each row, with the funding methods each company lists, is in the tracker below.
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, and re-run on 2026-09-25, for 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, re-checked on 2026-11-09 (MoneyGram’s and Western Union’s wording is quoted as of the re-check; Pangea was added on 2026-11-09). 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, re-checked 2026-11-09) |
|---|---|---|---|
| Pangea | Debit Card, Credit Card, Bank Account; Bank Account “limited to Mexico and Philippines transfers”. For Guatemala: “Most U.S.-issued Visa and Mastercard debit and credit cards are accepted” | Not listed — no cash, money order or cashier’s check appears among the payment methods | pangeamoneytransfer.com/help and pangeamoneytransfer.com/guatemala |
| 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 Money Transfer (affiliate link) | 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 money in person with cash, no bank account needed”; and, for a transfer started online, “Then visit a MoneyGram location near you within 24 hours to pay in cash and complete your transfer” | 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. Five of the eight 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 five — 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.
Two providers address the tax directly: Pangea (quoted in the provider-by-provider table above) and Xoom. 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; unchanged on 2026-11-09.) That is Xoom’s own statement about Xoom, as Pangea’s is Pangea’s own, 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 statement on the tax on the pages checked on 2026-11-09.
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 |
| Federal Register API re-run, term “remittance transfer”, published on or after 2026-01-01 (one result: the same proposed rule, 2026-07085) | Office of the Federal Register | https://www.federalregister.gov/api/v1/documents.json?conditions[term]=%22remittance%20transfer%22&conditions[publication_date][gte]=2026-01-01 | 2026-09-25 |
| Federal Register API re-run, same query (two results: the proposed rule 2026-07085, and CFPB notice 2026-22227 of 30 October 2026 on Regulation E paperwork, not a § 4475 rule) | Office of the Federal Register | https://www.federalregister.gov/api/v1/documents.json?conditions[term]=%22remittance%20transfer%22&conditions[publication_date][gte]=2026-01-01 | 2026-11-09 |
| 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; re-checked 2026-11-09 |
| 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; re-checked 2026-11-09 |
| 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; re-checked 2026-11-09 |
| 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; re-checked 2026-11-09 |
| Payment methods FAQ (United States) | MoneyGram | https://www.moneygram.com/us/en/help-center/faq/send-receive/payment-methods | 2026-08-11; re-checked 2026-11-09 |
| Send money in person | MoneyGram | https://www.moneygram.com/us/en/send-and-receive/money-transfers-in-person | 2026-08-11; re-checked 2026-11-09 |
| Send money online (funding methods and pay-in-store) | Western Union | https://www.westernunion.com/us/en/send-money.html | 2026-08-11; re-checked 2026-11-09 |
| Products / how it works (first-transfer funding methods) | Intermex | https://www.intermexonline.com/en/how-it-works | 2026-08-11; re-checked 2026-11-09 |
| Remittance Tax 2026: What It Means for You (company statement on the 1% tax; post dated January 29, 2026) | Pangea Money Transfer | https://www.pangeamoneytransfer.com/blog/remittance-tax | 2026-11-09 |
| Help centre (payment methods; bank-account payment limited to Mexico and the Philippines) | Pangea Money Transfer | https://pangeamoneytransfer.com/help | 2026-11-09 |
| Send money to Guatemala (payment methods for the corridor) | Pangea Money Transfer | https://pangeamoneytransfer.com/guatemala | 2026-11-09 |
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.
Frequently Asked Questions
Does the 1% US remittance tax 2026 apply to Pangea Money Transfer?
Not when the transfer is paid with a U.S. bank account, U.S. debit card or U.S. credit card, according to Pangea’s own published statement: ‘That means that when you fund your transfers using these methods with Pangea, the 1% remittance tax will not apply’ (Pangea blog post dated January 29, 2026, checked 9 November 2026). The same post names the methods as a U.S. bank account, a U.S. debit card excluding general-use prepaid cards, or a U.S. credit card. Pangea’s help page lists Debit Card, Credit Card and Bank Account as payment methods, with Bank Account ’limited to Mexico and Philippines transfers’, so a Pangea transfer to Guatemala is paid by card; Pangea does not list cash, money orders or cashier’s checks as a way to pay (checked https://pangeamoneytransfer.com/help, 9 November 2026). That matches the statute: section 4475(c) taxes only transfers funded with cash, a money order, a cashier’s check or a similar physical instrument, and section 4475(d)(2) excludes transfers ‘funded with a debit card or a credit card which is issued in the United States’.
What law actually imposes the 1% remittance tax?
Internal Revenue Code section 4475, added by section 70604(a) of Public Law 119-21 (signed July 4, 2025, 139 Stat. 285). Section 4475(a) reads: ‘There is hereby imposed on any remittance transfer a tax equal to 1 percent of the amount of such transfer.’ The effective-date provision, section 70604(c) at 139 Stat. 286, reads: ‘The amendments made by this section shall apply to transfers made after December 31, 2025.’ (26 U.S.C. 4475, retrieved 2026-08-11.)
Is the tax charged on the fee too, or only on the money my family receives?
Under the IRS and Treasury proposed regulations, the base is the amount that reaches the recipient. The proposed rule defines the taxable amount ‘as the amount that will ultimately be transferred to the designated recipient; amounts that will not be transferred to the designated recipient are not included,’ and states that ‘Service fees, State taxes, and charges for other goods and services that are not ultimately transferred to the designated recipient would not be part of the remittance transfer amount.’ These are proposed, not final, regulations (REG-114499-25, 91 FR published April 13, 2026; retrieved 2026-08-11).
Who sends the money to the IRS — me or the company?
Section 4475(b)(1) says the tax ‘shall be paid by the sender.’ Section 4475(b)(2) says the remittance transfer provider ‘shall collect the amount of the tax… from the sender and remit such tax quarterly to the Secretary.’ Section 4475(b)(3) adds that where the tax is not collected at the time of transfer, the provider pays it. The proposed regulations state the tax is reported on Form 720, Quarterly Federal Excise Tax Return, with semimonthly deposits under 26 CFR 40.6302(c)-1(a)(1) (REG-114499-25, retrieved 2026-08-11).
Are small transfers excluded?
The proposed regulations exclude from ‘remittance transfer’ the ‘Small value transactions. Transfer amounts, as described in 12 CFR 1005.31(b)(1)(i) revised as of January 1, 2026, of $15.00 or less.’ That exclusion appears in the proposed rule, not in the text of section 4475 itself (REG-114499-25, retrieved 2026-08-11).
Do Apple Pay or Google Pay count as a card for the exclusion?
No published answer was found. Section 4475(d)(2) excludes transfers ‘funded with a debit card or a credit card which is issued in the United States,’ and section 4475(e)(2)-(3) defines both terms by reference to the Electronic Fund Transfer Act. Neither the statute nor the April 13, 2026 proposed regulations use the words ‘wallet,’ ‘Apple Pay’ or ‘Google Pay’ anywhere — searched in full on 2026-08-11. Several providers list those wallets as accepted payment methods, so the question is live and unanswered by the instruments that would settle it.
Have final regulations been issued?
Not as of 2026-11-09. A Federal Register search for documents on remittance transfers published since 2026-01-01, first run on 2026-08-11 and re-run on 2026-09-25 and 2026-11-09, returns one section 4475 document: the Notice of Proposed Rulemaking of April 13, 2026 (REG-114499-25, RIN 1545-BR98). The 2026-11-09 run also returns a Consumer Financial Protection Bureau paperwork notice of October 30, 2026 on Regulation E (2026-22227), which is not a section 4475 rule. The comment period closed June 12, 2026. The proposed applicability date is ‘calendar quarters beginning on or after the date these regulations are published as final regulations.’
Does the tax depend on how my family in Guatemala collects the money?
The statute conditions the tax on what the sender hands the provider, not on the payout method. Section 4475(c) applies the tax ‘only to any remittance transfer for which the sender provides cash, a money order, a cashier’s check, or any other similar physical instrument… to the remittance transfer provider.’ Nothing in section 4475(c) or (d) refers to how the designated recipient receives the funds.
