New 1% Tax on International Money Transfers

Another provision of the recent One Big Beautiful Bill (OBBB) is a 1% excise tax on money transfers to outside of the US.  

Prior to the passage of OBBB, the Senate and House versions of the bill had different terms with an initial rate of 3.5% and one version exempting US citizens and Green Card holders. After compromises on both sides the new legislation imposes a 1% tax on international transfers that involve cash transfers. Cash meaning, cash, money orders and cashier’s checks. 

The tax does not apply to transfers that are funded through US bank accounts, credit/debit cards. This means the common cross border checking accounts some Canadian banks have for Canada/US transfers (and other cross border combinations with other banks) is not affected.