S-2002 : Still Just a Bill

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The bill S.2002, also known as the "Requiring Excise for Migrant Income Transfers Act" or the "REMIT Act," proposes to amend the Internal Revenue Code of 1986 by establishing a new tax on remittance transfers. Here's a breakdown:

• Tax on Remittance Transfers: A 15% excise tax would be imposed on any remittance transfer, which is defined using the existing definition in the Electronic Fund Transfer Act.
• Payment and Collection: The sender of the remittance transfer is responsible for paying the tax. The remittance transfer provider (e.g., a money transfer company) is obligated to collect the tax from the sender and remit it to the Secretary (likely the Secretary of the Treasury) on a quarterly basis. The provider may be secondarily liable for the tax.
• Exception for U.S. Citizens and Nationals: Remittance transfers sent by verified U.S. citizens or nationals through qualified remittance transfer providers would be exempt from the tax. A qualified provider is one that has an agreement with the Secretary to verify the sender's citizenship or national status.
• Refundable Tax Credit: A refundable income tax credit would be available to U.S. citizens and nationals for the amount of remittance transfer taxes they paid during the taxable year. This credit requires the taxpayer to include their social security number on their tax return and to substantiate that they paid the tax.
• Reporting Requirements: Remittance transfer providers would be required to report information to the IRS, including the aggregate number and value of exempt transfers (those sent by U.S. citizens/nationals) and details on transfers for which the sender intends to claim the tax credit.
• Effective Date: The provisions related to the tax on transfers and the reporting requirements would generally apply to transfers made after December 31, 2025. The tax credit provisions would apply to taxable years ending after December 31, 2025.

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