Beginning January 1, 2026, a new 1% federal remittance tax in the United States will take effect on certain international money transfers, affecting many Caribbean families who receive funds from relatives and friends living or working in the U.S.

The tax is charged on money transfers paid for with cash, money orders, or cashier’s cheques when sent from the United States to another country, including Antigua and Barbuda and other Caribbean nations.

It applies regardless of the sender’s citizenship or immigration status. Remittances are a major financial lifeline for many households across the Caribbean, funding everyday expenses, education, healthcare, small business support and community needs.

Even a 1 % tax on transfers — on top of existing fees charged by money-transfer services — will mean less money reaching families in Antigua, Barbados, Dominica, Grenada, Jamaica, St. Lucia, Trinidad and Tobago and elsewhere in the region.

Economists and remittance experts warn that although 1 % may seem small, it could have measurable impacts on household incomes and local economies, particularly in smaller remittance-dependent nations, and could even reduce overall remittance flows.

The good news for Caribbean senders and receivers is that the additional 1 % does not apply to transfers funded through bank accounts, debit or credit cards, or many major digital remittance apps. Those who switch to these electronic methods can continue to support their families without the extra tax.

The U.S. remains the largest source of remittances to the Caribbean. With total remittances to the region running into billions of dollars annually, even modest policy changes in the U.S. can ripple outward, affecting consumer spending, small business investment and financial stability in Caribbean economies.

As the tax takes effect in 2026, many Caribbean households and policymakers will be watching closely to see how families adapt, and whether more senders opt for tax-free digital channels to keep more money flowing home.