Sponsors
Updated 12 hours ago
Last progress July 4, 2025 (7 months ago)
Creates a new excise tax on remittance transfers and a matching refundable federal income tax credit for U.S. citizens and nationals equal to the excise tax they actually paid. Requires remittance-transfer providers to file detailed tax returns with the IRS and to give itemized statements to named senders, establishes substantiation and Social Security number rules for claiming the credit, adds related penalties and conforming tax-code changes, and makes most provisions effective for transfers after December 31, 2025.
Insert a new subchapter into the Internal Revenue Code after subchapter B (creating a new chapter 36 related to remittance-transfer excise tax).
Create a new refundable income tax credit (section 36C) that allows an individual who is a U.S. citizen or national to claim a credit equal to the aggregate amount of taxes the individual paid under section 4475 during the taxable year. The credit requires the taxpayer to include the individual's Social Security number (and spouse's SSN if married) on the tax return, meet substantiation rules showing the tax was paid and that the sender provided the required certification and information to the remittance transfer provider, and uses the definitions in section 4475. The provision also applies anti-conduit rules in section 7701(l) as provided in section 4475(e).
Add a new reporting requirement (section 6050AA) for remittance transfer providers to file returns (at times the Secretary provides) with details depending on the type of transfers: (1) for qualified providers where section 4475(a) does not apply due to 4475(c): report the aggregate number and value of such transfers; (2) for transfers where the sender certifies intent to claim the 36C credit and provides required information: report the sender's name, address, and Social Security number, the tax amount paid by the sender under section 4475(b)(1), and the tax remitted by the provider under section 4475(b)(2); (3) for other transfers: report the aggregate amount of tax paid under section 4475(b)(1) and the aggregate amount remitted under section 4475(b)(2).
Require every person who must make the return under section 6050AA(a) to furnish, at such time as the Secretary may provide, to each person named in the return a written statement showing (1) the name and address of the information contact of the reporting person, and (2) the information from subsection (a)(2) that relates to that person.
Specify that any term used in the new provisions that is also used in section 4475 has the meaning given in section 4475.
Who is affected and how:
Remittance senders (U.S. citizens and nationals): Will pay the new excise tax on transfers but can claim a refundable credit equal to the tax paid if they meet substantiation and SSN requirements. For eligible senders the credit offsets the tax; senders who cannot provide required documentation or an SSN may not receive the refundable benefit and thus face a net cost.
Remittance-transfer providers (banks, money transmitters, fintechs): Face new compliance and reporting obligations — preparing and filing detailed returns, issuing statements to senders, maintaining supporting records, and facing penalties for noncompliance. Implementation will likely require system changes and additional administrative costs.
Remittance recipients abroad: Indirectly affected if providers or senders change pricing or reduce transfer volume; recipients could see higher costs if providers pass along non‑refunded taxes or administrative fees.
IRS and federal administration: Must build new forms, verification processes for refundable credits, and enforcement capacity to review provider returns and sender substantiation claims.
Communities and equity considerations: The SSN and substantiation rules may disadvantage senders without SSNs (noncitizen residents, recent immigrants, or informal remitters), potentially reducing access to the refundable credit and increasing the effective cost of sending money for those groups.
Overall effect: The law pairs a new excise tax with a refundable credit to neutralize the tax for documented U.S. citizens/nationals, but it creates notable compliance burdens for providers and may leave some senders (or recipients) exposed to higher net costs if they cannot substantiate claims or lack SSNs. The measure also requires IRS operational changes and likely increases administrative enforcement work.
Read twice and referred to the Committee on Finance.
Updated 1 week ago
Last progress September 26, 2025 (4 months ago)
Last progress June 10, 2025 (8 months ago)
Introduced on June 10, 2025 by Eric Stephen Schmitt