HR-5595 : Still Just a Bill

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The "Requiring Excise for Migrant Income Transfers Act," or REMIT Act (H.R. 5595), proposes significant modifications to the existing tax on remittance transfers.

Key provisions of the bill include:

• Increased Tax Rate: The legislation would amend the Internal Revenue Code of 1986 to increase the excise tax on remittance transfers from 1 percent to 15 percent.
• Exception for U.S. Citizens and Nationals: An exception to this increased tax would be created for transfers sent by verified United States citizens or nationals. This exception applies only if the transfer is conducted through a "qualified remittance transfer provider" that has an agreement with the Secretary of the Treasury to verify the sender's U.S. citizenship or national status.
• Refundable Income Tax Credit: U.S. citizens and nationals who pay the excise tax on remittance transfers would be eligible for a new refundable income tax credit. To qualify, taxpayers must include their Social Security number(s) on their tax return and provide substantiation that they paid the tax for a transfer where they certified their intent to claim the credit to the provider.
• Reporting Requirements for Providers: Remittance transfer providers would be required to submit returns to the Secretary, detailing:
  • The aggregate number and value of remittance transfers exempted for verified U.S. senders.
  • For transfers where the sender indicates an intent to claim the credit, the sender's name, address, Social Security number, and the amounts of tax paid and remitted.
  • The aggregate tax amounts for all other remittance transfers.
  Providers would also be required to furnish statements to individuals whose information is reported for credit claims.

The amendments outlined in the REMIT Act would generally take effect as if included in Section 70604 of Public Law 119-21, with the provisions for the new refundable tax credit applying to taxable years ending after December 31, 2025.

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