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Starting January 1, 2026, a special 1% tax has come into effect in the United States on certain remittance transactions sent abroad.
The measure specifically affects remittances paid in cash by the sender, through postal money order, cashier's check, or "similar physical instrument," and requires transfer providers to collect this tax and adhere to a reporting and deposit scheme with the IRS.
According to the official information, the 1% tax applies when the sender pays the remittance with:
- Cash
- Postal money order
- Cashier's check
- Similar physical instrument
In practice, this affects those who send remittances using these payment methods and the companies/providers that process and collect the transaction, because they are the ones responsible for collecting the tax and transferring it to the treasury.
From the date of entry into force, providers must:
- Collect the special 1% tax on applicable transactions (according to the payment method).
- Make biweekly deposits.
- Submit quarterly statements to the IRS.
The document also specifies that the first biweekly deposit is due on January 29, 2026.
The Department of the Treasury and the IRS anticipate limited penalty relief during the first three quarters of 2026.
According to the cited guidelines, providers could avoid fines for deposits if they deposit on time (even if there are adjustments later) and pay any deficiencies before the due date of the corresponding quarterly declaration (Form 720).
The impact could be severe for Mexico, India, China, and the Philippines, as they are the largest recipients of remittances from the United States.
According to El País, remittances are growing in Latin American countries such as Honduras, Guatemala, and Colombia.
In Mexico, they reached a record $64.7 billion in 2024. However, from January to October 2025, they recorded a decline: only $51.3 billion was accounted for, a decrease of 5% compared to the same period in 2024.
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