Archive · 2 Jun 2025
US Proposes Tax on Remittances in 'Beautiful Bill' Impacting Foreign Nationals
The US is planning a new tax on money sent out of the country by non-citizens, like people on work visas.
This tax, at 3.5%, will start in 2026.
It affects those sending money to India, which gets a lot of money from the US.
This tax could make it more expensive to send money home and might impact families.
India, Mexico, and others who rely on these remittances are worried about the impact.
The 'One Big, Beautiful Bill Act' includes a 3.5% excise tax on remittances from the US.
The tax applies to non-citizens, including visa holders and green card holders.
The tax will impact non-resident Indians who earn income in the US.
It could reduce remittances to India, which received approximately $32 billion from the US in 2023-24.
Countries reliant on US remittances, like Mexico and El Salvador, oppose the bill.
- Who
- Non-citizens including visa and green card holders, non-residents, and financial institutions
- What
- A 3.5% excise tax on remittances by non-citizens.
- When
- To take effect from January 1, 2026
- Where
- The United States
- Why
- To reform taxes and cut government spending.
Opponents (India, Mexico, El Salvador, etc.)
Supporters (implied)
Impact on Remittances
Opponents (India, Mexico, El Salvador, etc.)
Could discourage formal transfers and strain financial support to families in India.
Supporters (implied)
Not explicitly stated.
- Remittance Tax Rate
- 3.5%
- Tax Effective Date
- January 1, 2026
- US Remittances to India (2023-24)
- $32 billion (approx.)
- Trump-era Tax Cut Status
- Permanent
Sources
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What the US 'One Big, Beautiful Bill Act' means for NRIs and visa holders
US proposes 3.5% excise tax on remittances: Who it will impact and how
