U.S. Proposes 5% Remittance Tax: What NRIs and Migrant Workers Must Know

A newly introduced bill in the U.S. Congress could significantly change how immigrant workers, including Non-Resident Indians (NRIs)—send money back home. If passed, the legislation would impose a 5% tax on international remittances by non-citizens, potentially affecting millions.

For Indian B2B visa consultants, tax advisors, and global mobility planners, this proposed tax brings urgent financial implications that your clients must prepare for, especially those on H-1B, F-1, or green card statuses.

What Is the 5% U.S. Remittance Tax?

Formally introduced by House Republicans in May 2025, the proposed bill suggests a 5% excise tax on money transferred abroad by non-U.S. citizens. That includes those on:

  • Green cards

  • H-1B, H-2A, H-2B, and F-1 visas

  • Non-citizen workers and residents
    The tax would be automatically deducted at the point of transaction by banks, wire services, and digital platforms like Western Union, PayPal, and MoneyGram.

U.S. citizens are exempt.

Who Will Be Impacted the Most?

This tax primarily affects the 40+ million foreign nationals working in the U.S.—many of whom regularly send funds to support families overseas.

• NRIs are among the most impacted.
 India receives more than $83 billion in annual remittances from abroad, much of it from the U.S.

Example:
Sending ₹1 lakh ($1,200) could now cost an extra ₹5,000 ($60) in taxes if this law is passed.

Feature Current Rule Proposed Rule
Tax on remittances None 5% for non-citizens
Who pays? No one Non-citizens only
Collection method Not applicable By financial service at the point of transfer
U.S. citizens affected? No Exempt

Timeline: When Could This Happen?

  • Bill introduced: May 12, 2025

  • Target House passage: By Memorial Day (May 26)

  • Potential law signing: July 4, 2025

  • Implementation: Could be immediate post-approval

How This Could Affect Immigrant Workers & NRIs

The tax will heavily impact those who:

  • Support family members overseas

  • Pay international tuition or healthcare

  • Send money to NRE/NRO accounts in India

  • Invest in real estate or property abroad

Workers may start consolidating remittances into larger but fewer transactions, though this increases scrutiny under U.S. tax laws like FATCA and FBAR.

Strategic Tips to Minimise Impact

If the bill becomes law:

  • Transfer funds before July 2025 to avoid the 5% tax

  • Consolidate transactions to reduce frequency

  • Consult financial advisors for updated remittance and reporting strategies

  • Document transactions to stay audit-ready

The Bigger Picture: Financial Shifts in U.S. Immigration Policy

The proposed tax aims to fund permanent extensions of U.S. tax cuts, expand the child tax credit, and support border security programs.

However, it places added financial pressure on migrants already contributing through work and taxes, especially those in essential sectors like IT, healthcare, and agriculture.

The bill also risks reducing the appeal of the U.S. as a work destination, particularly for skilled professionals, compared to global opportunities.

Conclusion: Prepare Before It Hits Your Wallet

The U.S. remittance tax proposal could mark a turning point in immigration finance. For NRIs, visa holders, and corporate relocation clients, this change could translate into thousands of added expenses every year.

Whether you're a tax advisor, student, or tech professional, the time to act is now. Pre-plan your finances, inform your clients, and stay ahead of any law that affects how global Indian workers support their families.

📢 Want more travel updates like this?
 👉 Follow our daily insights at blog.agentbazar.in and transform how you support your clients at every stage of travel.

Share this post:

🌍 Stay Connected with the Travel Community

Follow us on Facebook, X (Twitter), Instagram, and YouTube for the latest travel updates and insights!

About the Agent Bazar Blog

The Agent Bazar Blog is your trusted source for industry news, airfare trends, visa updates, and insights tailored for B2B travel agents, consolidators, corporate travel planners, and tour operators.

Our goal is to support travel professionals with timely, actionable content that enhances business growth, improves efficiency, and keeps you informed in a fast-changing travel industry.

Explore our articles, stay ahead with vital updates, and make smarter decisions for your travel business.

About Agent Bazar

Agent Bazar is a next-generation series fare aggregator and B2B airfare marketplace in India, developed by Tripforu Holidays Pvt Ltd (est. 2016).

Backed by over 15 years of industry experience, the platform specializes in fixed departure fares across 300+ sectors in India and key Asian countries.

With a growing network of over 10,000 registered travel agents, Agent Bazar connects consolidators and sellers with agents through a zero-commission model, unlike traditional portals that charge 5–8% in fees.

The platform empowers travel agents and consolidators with direct access to reliable inventory, real-time fare discovery, and simplified group booking tools.

🌐 Visit: agentbazar.in