Sponsor
Eric Stephen Schmitt
Senator · R-MO
Senator · R-MO
The bill imposes a new excise tax on remittances but creates a refundable credit and reporting requirements so most eligible senders can recover the tax and the IRS can oversee claims — trading higher upfront costs and added provider compliance for stronger documentation and refundability, while risking exclusion of SSN-less or undocumented senders.
People who send remittances (including low-income households and immigrants) can recover the excise tax they pay through a refundable credit, reducing or eliminating the net cost of the new tax for eligible senders.
Taxpayers and remittance providers will face new reporting and substantiation rules and providers must furnish statements to senders, giving individuals the documentation needed to claim the credit and enabling better IRS oversight and more accurate credit administration.
People who send money abroad (especially low-income senders) will face a new excise tax that increases the upfront cost of remittances unless the refundable credit fully offsets it.
Senders without Social Security numbers or undocumented immigrants may be excluded or face significant difficulty claiming the refundable credit because the law requires SSNs and certifications to receive the refund.
Remittance providers (including small businesses) will incur new reporting and compliance costs, which are likely to be passed on to customers in the form of higher fees or reduced services.
Based on analysis of 2 sections of legislative text.
Creates a federal excise tax on remittance transfers, requires new provider reporting, and offers a refundable credit to qualifying U.S. senders who substantiate the tax paid.
Official title: Amend the Internal Revenue Code of 1986 to establish a tax on remittance transfers.
Introduced June 10, 2025 by Eric Stephen Schmitt · Last progress June 10, 2025
Imposes a new excise tax on remittance transfers and creates matching tax and reporting rules. The bill adds a new Chapter 36 excise tax on money transfers sent abroad, requires remittance providers to report transfer and tax information to IRS and senders, establishes a refundable credit so U.S. taxpayers who paid the excise can reclaim the amount on their income tax return (with eligibility and substantiation rules), and creates penalties for reporting failures. The rules take effect for transfers after December 31, 2025.