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The short answer
Yes. The 1% excise tax in section 4475 of the Internal Revenue Code has no citizenship or immigration-status condition: it applies to any sender, citizen or not, whose remittance transfer is paid for with cash, a money order, a cashier's check or a similar physical instrument. Transfers funded from a US bank account or a US-issued debit or credit card are exempt.
The short answer
The tax follows the payment method, not the passport. Section 4475, added by Public Law 119-21 and applying to transfers made after 31 December 2025, imposes a 1% tax on remittance transfers and makes the sender liable for it. It borrows the definitions of "sender" and "remittance transfer" from the Electronic Fund Transfer Act. The section text contains no condition about citizenship, green card status or visa type. A naturalised Nigerian-American paying cash at an agent pays it; a student on an F-1 visa paying by debit card does not.
Which funding is taxed and which is not
| How you pay the provider | Taxed? | Basis |
|---|---|---|
| Cash at an agent location | Yes, 1% | s.4475(c) |
| Money order | Yes, 1% | s.4475(c) |
| Cashier's check | Yes, 1% | s.4475(c) |
| Other similar physical instrument | Yes, as Treasury determines | s.4475(c) |
| Transfer from an account at a covered US financial institution | No | s.4475(d) |
| Debit or credit card issued in the US | No | s.4475(d) |
The IRS instructions for Form 720 (revised June 2026) describe the tax in the same terms: it applies "when the sender makes the transaction with cash, a money order, a cashier's check, or a similar physical instrument." Proposed regulations published in April 2026 would, according to Pillsbury's summary, extend the exemption to any credit card and to general-use prepaid cards. CPA Practice Advisor reports that taxpayers may rely on those proposed rules for transfers after 31 December 2025 until final rules are issued.
Small transfers
Because the tax uses the EFTA definition of a remittance transfer, transfers of $15 or less fall outside it; the CFPB rule excludes those amounts from the definition, and Pillsbury's summary notes the same exclusion.
Who collects it and how it shows up
You do not file anything. The provider collects the tax from you when you pay and pays it to the IRS: the Form 720 instructions say providers deposit semimonthly and file quarterly under IRS No. 155. If the provider fails to collect it, the statute makes the provider secondarily liable. The CFPB disclosure rule already requires the pre-payment disclosure and receipt to show fees and taxes, so the tax should appear as a line before you confirm.
Worked example
Example only. You hand an agent $400 in cash to send to your mother in Enugu. The tax is 1% of $400, which is $4, on top of any transfer fee the provider charges. If you instead pay the same $400 from your checking account in the provider's app, no excise tax applies. The exchange rate and fee are separate, and still need comparing; see how the FX margin works.
Why the confusion
Many Nigerians in the US first heard of the tax before it became law, through word of mouth and social media. What matters is the enacted text, which is short and readable on the Cornell Legal Information Institute site. It names the sender, the provider and the funding method. It does not mention citizenship, residence status or the destination country, so a transfer to Nigeria is treated like a transfer anywhere else.
Common questions from Nigerian senders
- Is it a tax on my income? No. It is an excise tax on the transfer, separate from your income tax return.
- Does dual citizenship change anything? No. Nationality is not part of the test.
- Does it apply when I wire from my bank? Money withdrawn from an account at a covered financial institution is exempt.
- Does it apply to money orders I mail? Paying a remittance provider with a money order is taxed. See sending money to Nigeria with a money order.
- Can I claim it back? The section contains no refund or credit provision for senders. Ask the provider about cancelled transfers.
This is information about the law as written and the IRS guidance we read in October 2026, not tax advice. Final regulations may change details such as the treatment of prepaid cards; check the IRS Form 720 instructions for the current position. For the paying side, who pays the tax on cash transfers goes further.
Where Pryme fits
A Pryme Personal Account is funded electronically rather than with cash at a counter. Outside Nigeria, Pryme's activities are carried out through regulated partners. The app shows the rate and the fee before you approve, and you can send or convert with Swap when it suits you.
Questions people ask
Does the remittance tax apply to green card holders?
Yes, if they pay with cash, a money order or a cashier's check. The law has no citizenship or status condition.
Is the 1% remittance tax only for immigrants?
No. The enacted section 4475 applies to any sender who funds a transfer with a physical instrument such as cash.
Do I pay the remittance tax if I use my debit card?
No. Transfers funded with a debit or credit card issued in the US are exempt under s.4475(d).
When did the remittance tax start?
It applies to transfers made after 31 December 2025, under Public Law 119-21.
Sources
- 26 U.S. Code s.4475 Remittance transfers (Cornell LII) · accessed Oct 2026
- IRS Instructions for Form 720 (Rev. June 2026) · accessed Oct 2026
- CPA Practice Advisor: IRS issues proposed regs on new 1% excise tax on remittance transfers (11 May 2026) · accessed Oct 2026
- Pillsbury: IRS remittance excise tax (13 Apr 2026) · accessed Oct 2026
- eCFR 12 CFR 1005.30 Remittance transfer definitions · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.