President Donald Trump has formally signed into legislation the One Large Lovely Invoice Act (OBBBA). The invoice, handed by the U.S. Senate and Home of Representatives alongside razor-thin margins, features a controversial new 1% federal tax on remittances, a coverage shift anticipated to have far-reaching implications for tens of millions of immigrant households, together with these within the Caribbean-American neighborhood.
The Senate approved the invoice 51–50 on July 1, with Vice President JD Vance casting the tie-breaking vote. It was narrowly handed within the Home 218–214 on July 3, and signed into legislation by Trump on Independence Day.
Included within the invoice is a brand new legislation that imposes a 1% tax on all remittance transfers, together with wire transfers, cash orders, and cashier’s checks. In contrast to earlier proposals that focused solely non-U.S. residents, the ultimate model of the invoice applies to all remittance senders, no matter their immigration standing.
For Caribbean-American households, a lot of whom recurrently ship a refund residence to assist relations, this added value will come on high of the 6% in fees already charged by companies like Western Union, MoneyGram, and digital platforms.
“It will hit working-class Caribbean households particularly laborious,” stated a Florida-based immigration advocate. “They’re not wiring luxurious cash; they’re sending $100 or $200 a month for groceries, faculty charges, or medicine. That additional 1% issues.”
Remittances account for inflows equal to five% to twenty% of GDP in lots of Caribbean economies, together with Haiti, Jamaica, the Dominican Republic, and Guyana. Whereas not counted in GDP, they’re a important supply of overseas revenue and family spending energy.
The tax will result in a projected 1.6% drop in remittance flows, as estimated by analysts, which may imply tens of millions of {dollars} much less in family revenue and overseas alternate for these international locations beginning January 1, 2026, when the tax takes impact.
The OBBBA marks the primary time the U.S. federal authorities has imposed a tax particularly on particular person remittance transfers. Earlier makes an attempt to take action failed in Congress.
“It will have a chilling impact on remittances,” stated one remittance coverage researcher. “And because the Caribbean is so carefully tied to the U.S.—socially, economically, and traditionally—it is going to be among the many first areas to really feel the shock.”
Within the meantime, monetary service suppliers and neighborhood organizations are anticipated to launch public schooling campaigns to assist households perceive the modifications and plan forward for the added prices.
The remittance tax will officially take effect on January 1, 2026.
