119-HR-8995 Journalist Public Summary

Public Summary — 119-HR-8995 (REMITTANCE Act)

Headline Summary: The bill would boost the federal excise tax on certain outbound remittance transfers from 1% to 25% and set up a narrow refundable credit for U.S. citizens who send money abroad for business or travel purposes, with the revenue dedicated to deficit reduction. [1]U.S. House - Office of the Law Revision Counsel — 26 U.S.C. §4475 — Imposition…

What It Does:

• Raises the current federal remittance excise tax rate from 1% to 25%. [1]U.S. House - Office of the Law Revision Counsel — 26 U.S.C. §4475 — Imposition…
• Aligns key terms with the federal remittance rule under the Electronic Fund Transfer Act (EFTA §919), which defines “remittance transfer,” “provider,” and “sender.” [2]Consumer Financial Protection Bureau — What is a remittance transfer and what a…
• Creates a refundable income-tax credit so U.S. citizens can reclaim excise tax paid on qualifying business- or travel-related remittances (details to be set by Treasury/IRS).
• Directs all receipts from this excise tax to the Treasury’s general fund solely for deficit reduction.

Why It Matters: Remittances are a major financial lifeline for families abroad; research and policy analysis warn that sharply higher taxes can raise senders’ costs and steer money into informal channels that are harder to monitor and regulate. [3]World Bank — Remittances Slowed in 2023, Expected to Grow Faster in 2024

Context: The current federal remittance excise tax took effect in 2026 at 1% and, under proposed IRS rules, applies to transfers funded with cash, money orders, cashier’s checks, or similar instruments; Congress is now considering whether to raise the rate dramatically via H.R. 8995. [4]Internal Revenue Service — Treasury, IRS issue proposed regulations on the new…

Who’s For It:

• Sponsor Rep. Chip Roy (R‑TX) argues a 25% rate would deter illegal immigration and keep more dollars in the U.S. economy. [5]House.gov (Office of Rep. Chip Roy) — Rep. Roy Introduces Bill to Tax Foreigner…
• Advocacy groups cited in the sponsor’s release—such as the Federation for American Immigration Reform and Citizens for Renewing America—support the bill on similar grounds. [5]House.gov (Office of Rep. Chip Roy) — Rep. Roy Introduces Bill to Tax Foreigner…

Who’s Against It:

• Economists and development experts warn remittance taxes reduce formal flows and can shift money to informal channels, undermining transparency and security while burdening low‑income families. [6]World Bank Blogs — Why taxing remittances is a bad idea
• Industry and policy analysts say higher rates could raise compliance costs and encourage workarounds instead of raising stable revenue. [7]Tax Foundation — US Remittances Tax Proposal: "Big Beautiful Bill"

What’s Next: As of June 2, 2026, the bill has been introduced (May 21, 2026) and referred to the House Ways and Means Committee; it awaits committee action before any potential House floor vote. [5]House.gov (Office of Rep. Chip Roy) — Rep. Roy Introduces Bill to Tax Foreigner…