DHS Increases Tax on American Employers: SchulzLaw Blog September 10, 2026 | by cmatthewschulz SchulzLaw, PC

By cmatthewschulz , 9 September, 2026

Uncle Sam, pockets overflowing with $100 bills, holds out his palm to four worried industry managers, including a female executive looking into an empty purse.

H-1B and L-1 Extension Fees Rise: $4,000–$4,500 Surcharges and a New Form I-129

By C. Matthew Schulz

The Trump Administration has expanded a substantial charge on certain American employers: effective September 9, 2026, covered companies must pay an additional $4,000 for H-1B extension petitions or $4,500 for L-1 extension petitions, including when an employee continues working for the same company. These charges come on top of otherwise applicable filing fees. In practical terms, the Administration is expanding a tax-like burden on maintaining a lawful U.S. workforce. Congress established the surcharge amounts years ago; the new rule expands the filings that trigger payment. USCIS’s new Form I-129 implements that financial change.

These new fees make retaining experienced, existing employees more expensive for American employer creating jobs, innovating, generating payroll and income taxes for the government, and helping the U.S. maintain competitiveness globally.

Employers can review the USCIS Form I-129 announcement and downloads, the DHS final rule published August 10, 2026, and the USCIS fee schedule. USCIS accepts the 02/27/26 and 09/09/26 form editions during the transition, but requires the 09/09/26 edition for petitions postmarked or electronically submitted on or after November 9, 2026. The expanded fee requirement already applies.

Media Coverage

The Economic Times reported on the expansion and concerns about repeated extension costs for employees who face lengthy employment-based green card backlogs. The Times of India highlighted the potential impact on major Indian IT services and consulting businesses. Companies that meet the statutory workforce thresholds now face recurring surcharges when they extend employees’ status, even without changing employers.

Which Employers Must Pay?

The surcharge applies only when the petitioning employer meets both requirements:

It employs 50 or more individuals in the United States.
More than 50% of those U.S. employees hold H-1B, L-1A, or L-1B status, counted together.

A company with 100 U.S. employees, including 51 in those classifications, meets the threshold. A company with exactly 50 of those 100 employees in the covered classifications does not. Nor does a company with fewer than 50 U.S. employees. USCIS confirms these criteria in its Form I-129 guidance.

The test focuses on the employer’s U.S. workforce and employees’ immigration classifications. It does not impose the surcharge on every company that sponsors an H-1B or L-1 worker.

What Changes in the Fees?

The dollar amounts remain the same. The significant change concerns when covered employers must pay them.

Case Type	Old Rule	New Rule
Initial H-1B	$4,000	Same
Initial L-1	$4,500	Same
Same employer H-1B extension	None	$4,000
Same employer L-1 extension	None	$4,500
Amendment without extension	None	None

Petitions involving a change of employer were already generally subject to the surcharge. The rule’s principal expansion reaches extensions for employees who remain with their current employer. The amendment exemption requires that the petition not seek an extension of currently authorized status. DHS final rule.

These payments supplement other applicable charges. Employers must calculate the Form I-129 filing fee, Asylum Program Fee, H-1B training fee, fraud-prevention fee, and any requested premium-processing fee separately, applying each fee’s own rules and exemptions. An exemption from one charge does not automatically excuse another.

For example, a covered employer filing 100 qualifying H-1B extensions now incurs $400,000 in additional surcharges. Twenty qualifying L-1 extensions add $90,000. Those illustrations exclude every other filing cost.

Congress Authorized the Amounts; DHS Expanded Their Application

This is not a new law. It is a 2015 law, not a Trump Administration Executive Order. What is new is the Administration change from the longstanding position adopted 20+ years ago to now tax American employers and increase revenue at the expense of American competitiveness.

Congress enacted the $4,000 and $4,500 amounts on December 18, 2015, in the Consolidated Appropriations Act, 2016, Public Law 114-113, Division O, Title IV, Section 402(g). The statute expressly refers to applications extending status. Statutory text.

Congress later extended the fee through September 30, 2027, in Section 30203(b) of the Bipartisan Budget Act of 2018. Unless Congress changes the law again, that remains the statutory endpoint. Public Law 115-123.

Congress explained why the charge differs from an ordinary petition-processing fee. Congress provided for half the receipts to enter the Treasury’s general fund and half to enter the 9-11 Response and Biometric Exit Account, subject to a $1 billion limit on deposits into that account. The dedicated account supports biometric entry-exit implementation.

Congress enacted these provisions alongside 9/11 health and compensation measures, describing every dollar as a direct contribution to first-responder healthcare would oversimplify the statute. Public Law 114-113.

Why the Change Matters to American Businesses

The new obligation makes retaining existing employees more expensive. A company may have invested years in training a professional, developing customer relationships, and pursuing permanent residence. The extension surcharge adds another cost to continuing that employment.

Calling the burden “tax-like” describes its economic effect: the government collects additional revenue from a defined group of employers to support broader public functions. That characterization does not itself establish illegality. Congress can authorize charges that exceed the cost of processing an individual petition, and here Congress expressly selected the surcharge amounts.

The stronger policy question concerns the cumulative burden. Repeated extension charges can influence project budgets, customer pricing, hiring, and decisions about where companies perform work. Employers should evaluate those consequences across their expected extension filings, rather than treating each surcharge as an isolated expense.

Could a Court Block the Expansion?

Congressional authorization does not make a statute immune from constitutional review. Courts can invalidate unconstitutional legislation. But the fact that Congress expressly enacted these amounts gives the underlying surcharge a stronger foundation against an argument that DHS invented an unauthorized fee.

A challenge to the 2026 rule would more naturally focus on DHS’s interpretation and implementation of the statute. The Administrative Procedure Act permits courts to set aside agency action that exceeds statutory authority, violates required procedures, or is arbitrary and capricious. 5 U.S.C. § 706.

Statutory interpretation. Under Loper Bright Enterprises v. Raimondo, courts independently determine the meaning of statutes; ambiguity alone does not require deference to an agency. Employers could argue that DHS’s previous interpretation correctly connected the surcharge to petitions requiring the fraud-prevention fee.

DHS likely would argue: Congress expressly included extensions in the 2015 legislation. The agency also reads “combined” as preventing duplicate assessment, rather than requiring a fraud-fee obligation before the surcharge can apply. DHS itself invokes Loper Bright in defending that reading. The decision therefore does not automatically favor a challenger. DHS’s statutory analysis.

Reasoned decision-making and reliance. Challengers would like question whether DHS adequately considered business commitments made under the previous approach, cumulative costs, and reasonable alternatives. In DHS v. Regents of the University of California, the Supreme Court explained that agencies changing policy must assess significant reliance interests. Agencies may ultimately give competing considerations greater weight, but they must undertake the analysis.

A reversal alone does not establish an APA violation. Nor is this expansion entirely new: DHS pursued it in the 2020 fee rule, which courts blocked on other grounds, and proposed it again in June 2024. That history complicates an argument that employers received no advance warning. Rulemaking history.

A challenge is possible; success is uncertain. Employers should follow the operative requirements unless an applicable court order or agency action changes them.

What Changed in Form I-129?

The fee-related revisions make the surcharge obligation independent of the separate fraud-prevention fee:

H-1B supplement, page 22, Section 2: The revised language requires $4,000 when the employer answers “Yes” to the workforce questions in Section 1, Items 1.d. and 1.d.1., subject to the exemption for amendments without an extension request.
L Classification Supplement, page 27, Section 3: The revised language requires $4,500 when the employer answers “Yes” to Items 4.a. and 4.b., with the corresponding amendment exemption.
Instructions, page 10: The revised directions separately describe the fraud fee and the Public Law 114-113 surcharge, state the workforce thresholds, and explain the amendment exemption.

Employers should review with their legal counsel the 09/09/26 Form I-129 and its instructions. The practical change is that an extension can require the surcharge even when no fraud fee is due.

Two Deadlines Require Separate Attention

September 9, 2026: expanded fees apply. USCIS requires the applicable surcharge for petitions postmarked or electronically submitted on or after this date.

November 9, 2026: the new form becomes mandatory. USCIS will reject the 02/27/26 edition if postmarked or electronically submitted on or after this date. Until then, employers may use either accepted edition. USCIS announcement.

Using the older form during the transition does not preserve the older fee treatment.

Employers should update filing templates, verify workforce counts, review upcoming extensions, and revise budgets now. They should also distinguish this effective surcharge expansion from the separate proposed $103,265 fee for cap-subject H-1B petitions, discussed in our related article below.