The 1% US remittance tax and who pays it.

It is a federal excise tax of 1% of the amount sent, created by the 2025 budget law as section 4475 of the Internal Revenue Code. It applies to remittance transfers made after 31 December 2025, is owed by the sender, and is collected by the transfer provider when the transfer is made.

The tax is on the act of sending, not on the recipient, and it is separate from any income tax question. Whether money sent to India is taxed once it arrives is covered in the guide on tax rules for money sent to India.

No, under the law as written. The tax reaches only transfers the sender pays for in cash, by money order, by cashier's check or with a similar physical instrument. ComplyRemit transfers are funded only from a US checking account in your own name, linked through Plaid, which is the kind of funding the law excludes.

There is no cash, money order or check option on ComplyRemit, so there is no version of a ComplyRemit transfer the tax was written for.

Transfers where you hand the provider cash, a money order, a cashier's check or a similar physical instrument, typically at a retail agent location. A transfer funded from an account at a US bank or credit union, or paid with a debit or credit card issued in the United States, is excluded from the tax.

On a transfer that is taxable, the tax is 1% of the amount sent: $10 on $1,000 and $50 on $5,000, charged on top of the transfer itself. On a transfer funded from a US bank account it is zero, because that transfer falls outside the tax altogether rather than being taxed at a lower rate.

The tax itself is law and has applied to transfers since 1 January 2026. The IRS published proposed regulations on its details in April 2026, and those are not yet final, so the edges may still move. The core distinction, cash-funded against account-funded, comes from the statute itself rather than from the regulations.