Key Takeaway
- The new Federal Remittance Excise Tax applies only to cash-based remittance transfers, not to bank wires sent from deposit accounts.
- Bank wires are exempt because the funds come from a client-held account, not from cash or money orders.
- New Omni Bank clients are not impacted, as all outgoing international wires are processed from deposit accounts, never directly from cash.
You may have seen recent headlines about a “Federal Remittance Excise Tax” (effective January 1, 2026) and wondered if it affects your international wire transfers.
With so much conflicting information online, we want to take a moment to clarify what this new tax — implemented under the One Big Beautiful Bill Act — actually covers, and why it does not apply to typical bank wire transfers.
What Is the Federal Remittance Excise Tax?
The new Federal Remittance Excise Tax imposes a 1% levy on certain types of remittance transfers. Crucially, the tax applies only when the sender provides a physical instrument — such as cash, a money order, or a cashier’s check — directly to the provider.
In other words, the tax is designed for transactions like:
- Cash-based money transfers sent overseas.
- Transfers funded by a money order or cashier’s check.
In these cases, the remittance provider must collect the 1% tax from the sender at the time of the transaction and remit it to the U.S. Treasury.
What Counts as a Remittance Transfer?
Under federal definitions, a remittance transfer means sending money to another country on behalf of a consumer, often using cash or a similar instrument.
For example, if someone walks into a money transfer business with $200 in cash and asks to send it to family overseas, that transaction would be considered a remittance transfer — and would be subject to the new excise tax.
What This Means for New Omni Bank Clients
At New Omni Bank, all outgoing international wire transfers are processed from client-held deposit accounts.
Our procedures require that any cash received to fund a wire be deposited into your account first — meaning we do not process direct cash-based or “walk-in” remittance transfers.
As a result, our clients are not impacted by the new tax when wiring funds overseas from a checking, savings, or other deposit account.
Closing Thought
Financial transparency and client education are central to our commitment at New Omni Bank.
This article is for educational purposes only and does not constitute legal or tax advice. Please contact us if you have questions about sending or receiving international wires. Our team is always happy to help explain how it works.
The information provided in this blog is for general informational purposes only and should not be considered legal, financial, or investment advice. All content is subject to change without notice. Please consult with a qualified professional or contact New Omni Bank directly for personalized guidance or the latest product information.
