REMITTANCE Act

Bill Number

H.R. 8995

Origin Chamber

House

Congress

119th Congress, Session 2

Policy Area

Taxation

Status

Introduced

Latest Action

2026-05-21: Referred to the House Committee on Ways and Means.

Last Updated

2026-06-11T23:41:33Z

AI-Generated Summary

Summary of H.R. 8995 (REMITTANCE Act)

Purpose

This legislation aims to increase the federal excise tax on remittance transfers (money sent abroad, often by individuals to family or for other reasons) and to direct the resulting revenue toward reducing the federal budget deficit. It also creates a tax credit to offset the tax for certain U.S. citizens using remittances for business or travel.

Key Provisions

• Tax Rate Increase: Raises the excise tax on remittance transfers from 1% to 25%.
• Removal of Prior Limits: Eliminates existing restrictions on the tax and adds definitions for terms like "remittance transfer" based on existing federal law (the Electronic Fund Transfer Act).
• Revenue Use: Requires all tax collections to go into the general Treasury fund solely for deficit reduction.
• New Tax Credit: Creates a refundable credit under the Internal Revenue Code (new Section 36C) allowing U.S. citizens to recover the tax paid on remittances used for business or travel purposes, as determined by the Treasury Secretary.
• Conforming Changes: Updates related tax code sections to include the new credit and sets an effective date for the credit starting after the bill's enactment.
• Technical Fix: Corrects a minor punctuation issue in the existing tax provision.

Significant Changes to Existing Law

• Amends Section 4475 of the Internal Revenue Code of 1986 by substantially increasing the tax rate and removing subsections that previously limited the tax's scope.
• Introduces a new refundable credit mechanism tied to remittance taxes, which did not exist before.
• Ties the effective date to a prior law (Section 70604 of Public Law 119-21) for the tax changes, while applying the credit to future tax years.

Potential Impacts

• Government Agencies: The Internal Revenue Service would handle collection of the higher tax and administration of the new credit, potentially increasing workload and requiring new guidance or systems.
• Citizens: U.S. citizens sending remittances for business or travel could claim a full offset via the credit, but others (including non-citizens) would face significantly higher costs on international transfers.
• International Relations: The higher tax could reduce the volume of remittances sent from the U.S. to other countries, affecting economies that rely on such inflows, though the bill does not directly address foreign policy.

Main Stakeholders Affected

• U.S. citizens who send remittances for business or travel purposes (eligible for the credit).
• Non-citizen residents and other individuals sending remittances (subject to the full tax increase without credit).
• Remittance transfer providers (such as banks or money services businesses) responsible for collecting and remitting the tax.
• The Department of the Treasury and IRS (for implementation and revenue management).
• Recipients of remittances in foreign countries (indirectly affected by potential changes in transfer volumes).

Notable Legal, Constitutional, or Political Implications

• The bill relies on Congress's taxing authority under the Constitution but does not introduce new constitutional questions beyond standard excise tax modifications.
• The distinction between citizens (eligible for credit) and non-citizens raises potential equal protection considerations under the Fifth Amendment, though the bill frames the credit as limited to citizens.
• Politically, the measure could influence debates on immigration, international financial flows, and fiscal policy by targeting remittances while directing proceeds to deficit reduction.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Roy, Chip [R-TX-21]

Recent Actions

• 2026-05-21: Referred to the House Committee on Ways and Means.
• 2026-05-21: Introduced in House
• 2026-05-21: Introduced in House

Bill Versions

• Reducing External Monetary International Transfers To Advance National Capital Efficiency Act — issued 2026-05-21 — PDF (4 pages)