The 1% Remittance Excise Tax: What Foreign Sellers Need to Know in 2026

A new 1% federal excise tax (IRC §4475) on outbound transfers took effect January 1, 2026. It applies on top of FIRPTA withholding when foreign sellers wire proceeds home — here's how it works.

Effective January 1, 2026, the United States now imposes a 1% federal excise tax on most outbound transfers of funds from the U.S. — codified as IRC §4475, enacted by the One Big Beautiful Bill Act. For foreign sellers of U.S. real estate, this is one more line item to plan for when the sale closes and the money eventually travels home.

Here's what the rule does, what it doesn't do, and how to plan around it.

What's taxed

The 1% excise applies to "remittance transfers" — wire transfers, money transmitter services (Western Union, MoneyGram), and similar electronic payment services that move funds out of the U.S. to a foreign destination.

The tax is collected by the remittance provider, not by the sender directly. When you wire $400,000 home from a U.S. bank account to your bank in Brazil, the bank or payment service is now required to withhold an additional 1% — $4,000 — and remit it to the IRS as the new excise tax.

What's NOT taxed

The rule has two important exclusions:

• Transfers funded by U.S.-issued debit or credit cards are excluded. If the money moves card-to-card, no excise.
• Domestic transfers (within the U.S.) aren't covered. The tax only triggers when money leaves the country.

It's not a tax on having a U.S. bank account, on selling U.S. property, or on holding money in escrow. It triggers only when the funds physically leave the U.S. financial system.

How it interacts with FIRPTA

Critically: the 1% excise is in addition to FIRPTA withholding, not a credit against it. FIRPTA is an advance payment of your U.S. income tax on the gain, eventually reconcilable on Form 1040-NR. The §4475 excise is a separate transactional tax on the transfer itself, with no relationship to your eventual income tax liability.

What this means in practice: if your sale generates a $200,000 refund the year after closing, and you wire that $200,000 home, you pay an additional $2,000 in excise tax on the wire. The $2,000 doesn't come back. It's a real cost.

Practical planning

Three moves that minimize the impact:

1. Time your transfers. If you have flexibility on when to repatriate funds, larger less-frequent transfers face the same percentage as smaller more-frequent ones — but you minimize compounded transaction costs and bank fees by consolidating.

2. Consider whether you actually need to move all the money. If you're planning another U.S. real estate purchase in the next year, holding proceeds in a U.S. brokerage or money-market account avoids the 1% twice (once outbound, then later if you'd transferred funds back to make the next purchase).

3. The card exclusion is real. For smaller balances or recurring international transfers, using a U.S.-issued debit card to fund payments to your home country can side-step the excise — the card payment networks are excluded by statute.

For larger sums and standard wire transfers, the 1% is just a planning input. A FIRPTA refund of $80,000 still nets you $79,200 after the wire excise — meaningful, but not transaction-changing.