Starting January 1, 2026, a new U.S. law will go into effect that changes the way some international money transfers are taxed. If you send money to people abroad, it’s important to understand what the remittance tax is and your alternatives to paying more than you need to.
What is the Remittance Tax?
The remittance tax is a new 1% additional tax that will be applied to certain international money transfers. Specifically, this tax applies only when customers pay for their transfers with:
- Cash
- Money orders
- Cashier’s checks
For example, if you send $1,000 abroad and pay with cash at a retail location you would owe an extra $10 in tax on top of your normal fees.
Which Transfers Will Not Be Taxed?
The good news is that many common payment methods are exempt from this additional 1% tax. Customers who pay with any of the following will not be charged the new tax:
- Debit or credit cards
- Bank accounts
- Digital wallets, including Google Pay™, Apple Pay®, and Vigo Money
- Prepaid cards, including the Western Union Prepaid Visa® Card.
This means you can continue to send money to family and friends without the extra cost simply by choosing a different way to pay.
What Does This Mean for You?
If you normally pay for transfers with cash, money ordersor cashier’s checks, you will see the new 1% tax added to your transactions starting in 2026. But there are easy alternatives:
- Pay with your debit card at retail locations. You can still send money in person but skip the extra tax.
- Use a Western Union Prepaid Visa Card. Load your card with cash and pay for your transfers remittance tax-free.
- Send on WesternUnion.com or through the app. When you pay with a debit card, credit card, or bank account, you won’t be charged the 1% tax. Plus, you can send from the convenience of home.
How Does This Affect My Receiver?
Your friends or family abroad will not be impacted by the new remittance tax. The 1% tax is only applied to the sender’s payment method (when paying with cash, money orders, or cashier’s checks).
This means the amount your receiver gets will stay the same. The only difference is whether or not you, as the sender, pay the additional tax based on how you choose to fund your transfer.
Stay Ahead of the Change
Western Union is here to help you adapt to this new law and continue sending money affordably and reliably. By choosing the right payment methods, you can avoid the remittance tax while still supporting the people who matter most to you.
Key Takeaways
- A 1% remittance tax begins January 1, 2026.
- It only applies if you pay with cash, money orders, or cashier’s checks.
- Choose an alternative by paying with debit/credit cards, bank accounts, digital wallets, prepaid cards or Vigo Money.
Tip: Sign up for a Western Union Prepaid Visa Card today and load it with cash to keep your transfers tax-free. Or download the Western Union® app to send online with your debit, credit, or bank account.
Western Union Prepaid® Visa Card is issued by Pathward®, N.A. Member FDIC, pursuant to a license from Visa U.S.A. Inc. Once registered, the card can be used everywhere Visa debit cards are accepted. Prior to registration, card valid to use only in the U.S.
