- US imposes 1% remittance tax in 2026.
- Targets outflows to Caribbean nations.
- Impacts families receiving vital support.
Money transfers from the United States to other countries, such as Antigua and Barbuda and other Caribbean countries, that are paid for with cash, money orders, or cashier's checks are subject to the levy.
It is applicable regardless of the immigration status or citizenship of the sender. For many households in the Caribbean, remittances are a vital source of financing for daily necessities, healthcare, education, small business support, and communal needs.
Families in Antigua, Barbados, Dominica, Grenada, Jamaica, St. Lucia, Trinidad & Tobago, and other countries in the region will receive less money if there is even a 1% tax on transfers on top of the current costs levied by money-transfer providers.
Even while 1% might seem insignificant, economists and remittance specialists caution that it might have quantifiable effects on household earnings and local economies, especially in smaller countries that rely on remittances, and it might even lower total remittance flows.
The good news for senders and recipients in the Caribbean is that transfers made via bank accounts, credit or debit cards, or a number of popular digital remittance apps are exempt from the extra 1%. By using these technological ways, individuals can continue to provide for their families without incurring additional taxes.
The Caribbean still receives the majority of its remittances from the United States. Even little changes in U.S. policy can have a significant impact on consumer spending and financial stability in Caribbean countries, as the area receives billions of dollars in remittances every year.
How will the tax affect transfers to Caribbean banks and cash pickup locations?
The 1 U.S. civil remittance duty, effective January 1, 2026, applies only to cash- funded transfers( cash, money orders, cashier's checks) via remittance providers like Western Union, adding $10 to a $1,000 send anyhow of destination, including Caribbean banks or cash volley points.
Direct electronic transfers to Caribbean bank accounts funded from U.S. bank accounts, disbenefit/ credit cards, or digital apps like Zelle, PayPal, or Wise are completely pure, allowing flawless low- cost support without the duty megahit.
Cash pickups at agents in Jamaica, Haiti, Dominican Republic, or away face the full 1 tax if sender uses cash- grounded styles, disproportionately burdening unbanked settlers; experts predict shifts to digital options, though aged or pastoral donors may struggle.