What is Remittance Transfer Excise Tax?
The Remittance Transfer Tax is a 1% federal excise tax imposed on certain international money transfers sent from the United States to foreign countries when funded with physical payment methods like cash, money orders, or cashier's checks. Beginning January 1, 2026, remittance transfer providers must collect this tax from senders, make semimonthly deposits, and report it quarterly to the IRS on Form 720.
The tax was enacted as part of the One Big Beautiful Bill Act, and the underlying U.S. law creates Internal Revenue Code Section 4475 imposing this excise tax on applicable remittance transfers.
Remittance Transfer Tax - Step-by-Step Online Filing Guide(with QuickFile720)
Step 1: Registration/Login
- New Users: Click on the Register button and enter your basic details to create an account. Once registered, log in with your credentials.
- Existing Users: Simply log in using your existing credentials to access your account.
Step 2: Add New Business (For New Users)
Click on Add New Business and enter your business details:
- Business Name
- Employer Identification Number (EIN)
- Business Type
- Address (with Zip Code) and Phone Number
- Signing Authority Information (Name, Title, Country, and Phone Number)
Your business information will be securely stored in our database for future filings.
- Existing Users: Select your pre-registered business from the dropdown list.
Step 3: Select Form Type
- From the dropdown menu, choose Form 720.
- Enter the Tax Year and select the correct quarter for your filing.
Step 4: Choose Filing Options
Select any applicable options, such as:
- Final Return
- Address Change
- Zero Liability
- One-Time Filing
Choose the options that best apply to your situation, and proceed to the next step.
Step 5: Select Remittance Transfer Tax Category
- We've provided well-organized categories with corresponding IRS numbers for easy selection.
- Choose “Remittance Transfer(155)”, under Other Excise Tax category to file your Remittance excise tax.
Step 6: Provide Tax Details
Based on your selected tax category, you will be asked to provide specific details to calculate your tax amount. For Remittance transfer tax you need to enter the tax date and principal amount.
Please review the details carefully, as the tax amount will be calculated based on the information you provide.
Step 7: Tax Calculation
- Our platform will automatically calculate your remittance transfer excise tax amount based on the Tax Rate: $0.01 for the principal amount you entered.
- Review the calculated tax amount displayed on the screen.
Step 8: Claim Refunds (If Applicable)
Select any applicable options, such as:
- If you're eligible for any refunds, you will have the option to claim your refund at this stage.
- If you are not eligible for a refund, simply skip this step and proceed to payment.
Step 9: Calculate Deposits or Overpayments for Payment Adjustment (If Applicable)
In this step, you will have the option to calculate any deposits or overpayments that may apply to your filing. If applicable, you can use these amounts to adjust your payment accordingly. If you are not eligible for any adjustments, simply skip this step and proceed to the next stage of the filing process.
Step 10: Payment Options
Choose one of the following secure payment methods to complete your filing:
- DIRECT DEBIT (Electronic Funds Withdrawal)
- EFTPS (Electronic Federal Tax Payment System)
Step 11: Final Summary
Review the final summary of your filing, which will include:
- All options selected
- The tax amount calculated
Once you’ve verified the details, proceed to complete your payment.
Step 12: IRS Submission and Instant Acknowledgement
Once your payment is processed, your remittance transfer excise tax filing will be successfully submitted to the IRS. Upon approval, you will receive an instant acknowledgment. In most cases, the IRS will approve your filing within a few hours.
This process ensures that your remittance transfer excise tax is filed accurately, securely, and on time. If you need any assistance, our support team is available to guide you through each step. Electronic 720 filing saves time.
Why Choose QuickFile720 for your Remittance Transfer Excise Tax Filing? Our Exceptional Features
1. IRS-Authorized Platform - Trust in our services, as we are an officially IRS-authorized e-filing platform, ensuring complete compliance and security for your tax filings.
2. AICPA SOC Certified Portal - Rest easy knowing that we follow rigorous industry standards, with AICPA SOC 2 certification, ensuring top-notch security, privacy, and integrity for your filings.
3. Most Affordable Portal - At just $35.95 per filing, we offer the most competitive pricing with no hidden fees, providing high-quality e-filing services at an unbeatable value.
4. Easy and Quick Navigation - Enjoy a seamless filing experience with our user-friendly interface that guides you through every step of the process, making your tax filings quick and effortless.
When Is Remittance Transfer Tax Due? (Form 720 Deadlines)
According to the IRS, the remittance transfer tax must be reported and paid quarterly on IRS Form 720, Quarterly Federal Excise Tax Return. However, semi-monthly deposits are required for certain businesses to remit the tax on time. The due dates for these filings are as follows:
Quarterly Form 720 Due Dates below:
| Quarter | Tax Period Covered | Form 720 Due Date |
|---|---|---|
| Q1 | January 1 - March 31 | April 30 |
| Q2 | April 1 - June 30 | July 31 |
| Q3 | July 1 - September 30 | October 31 |
| Q4 | October 1 - December 31 | January 31 (following year) |
Semi-Monthly Deposit Due Dates:
- For remittance transfer tax filers, semi-monthly deposits are required starting January 2026.
- These deposits are due on the 1st and 15th of each month.
Important Notes:
- If the due date falls on a weekend or federal holiday, the deadline is automatically moved to the next business day.
- Form 720 must be filed even if you only have liability for one quarter during the year.
- Many businesses opt for 720 e-filing their remittance transfer tax to avoid delays and receive faster IRS acknowledgment.
- Semi-monthly deposits ensure that businesses remain compliant with the IRS's requirements for timely payments of the remittance transfer tax.
This schedule is designed to help businesses stay compliant with IRS quarterly and semi-monthly tax reporting and payment requirements for the Remittance Transfer Tax.
What are the Remittance Transfer Excise Tax Penalties (IRS Rules)
The penalties for the remittance excise tax are the same as those for Form 720 because the remittance excise tax is reported on IRS Form 720, Quarterly Federal Excise Tax Return.
Below are the common penalties applicable to Form 720 filings.
| Penalty Type | Description | Penalty Amount |
|---|---|---|
| Late Filing Penalty | If Form 720 is filed after the due date and there is unpaid tax. | 5% of the unpaid tax per month (or part of a month), up to 25% of the total unpaid tax. |
| Late Payment Penalty | If the excise tax due is not paid by the filing deadline. | 0.5% of the unpaid tax per month, up to 25% of the unpaid tax. |
| Interest on Unpaid Taxes | Interest is charged on unpaid taxes and penalties until the balance is fully paid. | Interest accrues from the due date of the return until payment is made. |
| Failure to Deposit Penalty | If required excise tax deposits (such as semimonthly deposits) are not made correctly. | The penalty amount varies depending on how late the deposit is made. |
Important Notes:
- The late filing penalty and late payment penalty can apply simultaneously, although the filing penalty may be reduced when both apply in the same month.
- Interest continues to accrue until the entire tax balance and penalties are paid.
- Businesses with larger excise tax liabilities may also be required to make regular tax deposits, and failing to deposit as required can lead to additional penalties.
How to Avoid Remittance Transfer Tax - Form 720 Penalties
To prevent penalties and additional charges for the Remittance Transfer Tax, follow these essential steps:
- File on Time - Submit your Form 720 for Remittance Transfer Tax by the quarterly due date to avoid late filing penalties.
- Make Semi-Monthly Deposits - If applicable, ensure you make the required semi-monthly deposits on the 1st and 15th of each month to stay in compliance with IRS payment requirements.
- Pay the Full Tax Amount - Ensure the full tax amount is paid on time. Failing to remit the correct amount will result in penalties and interest.
- Use Electronic Filing and Payment - Utilize electronic filing and EFTPS (Electronic Federal Tax Payment System) for deposits to reduce errors and delays, speeding up the processing of your payments.
Key Points to Remember for Remittance Transfer Tax:
- Tax Rate: A 1% excise tax applies to the total amount of certain remittance transfers sent from the U.S. to foreign countries when funded with physical instruments like cash, money orders, or cashier’s checks.
- What's Taxable: The tax applies to remittance transfers facilitated through financial institutions or money transfer services. It does not apply to wire transfers or payments made through digital platforms like PayPal or Venmo.
- Collection: Providers of remittance transfer services must collect the 1% tax from the sender at the time of the transfer.
- Reporting & Payment: The tax is reported and paid quarterly on IRS Form 720, Quarterly Federal Excise Tax Return. Additionally, providers must make semi-monthly deposits for the tax via EFTPS.
- Who Pays: The service provider is responsible for collecting and remitting the tax. If the tax is not collected from the sender, the provider remains liable for payment.
