If you are a United States taxpayer, you can pay taxes using your credit card. Whether you pay your taxes in April or make estimated tax payments throughout the year, paying taxes with a credit card can provide a consistent opportunity to earn credit card rewards with a new cardmember welcome bonus or take advantage of 0% financing on a new card.
Here’s what you need to know about paying taxes with a credit card.
In this article…
- How to pay federal taxes with a credit card. An overview of how to pay your federal taxes with the credit card, which processors process payments, and how to avoid scams.
- Step by step: payUSAtax example. Walkthrough of paying federal taxes with a credit card using payUSAtax, one of the IRS’s authorized payment processors.
- How much does it cost to pay taxes with a credit card? Credit card processing fees for the IRS-authorized processors.
- Paying state taxes with a credit card.
- Why pay taxes with a credit card? Reasons why you might want to pay your taxes with a credit card.
- Frequently asked questions.
How to pay federal taxes with a credit card
The IRS does not accept credit card payment directly. Instead, it partners with three independent processors to process credit card tax payments. These processors all charge a fee to process your payment by credit card.
There are only three authorized processors that the IRS lists on its website:
If you are using anyone other than the three processors listed above, you are likely either paying a higher fee than you need to or you are being scammed. The best way to avoid scams is to go directly to IRS.gov and use the links on the IRS website. Be skeptical of links on non-IRS websites and search results that are marked as “Promoted.” Do not respond to emails or phone calls demanding payment. If the IRS is contacting you, they will contact you by mail.
Step by step: payUSAtax example
Here’s a walkthrough of making a payment with payUSAtax. Each of the processors will follow a similar process.
First, you’ll need to select what type of payment you’re making. If you are paying your 2023 federal taxes, you’ll select “Form 1040 Current Tax Return 2023” or the similar selection at the processor you’re using. Remember that the taxes you file in April 2024 are for the 2023 tax year. You can also pay estimated taxes for the upcoming tax year if you are required to do that.
Next, you’ll enter your payment details. Have your 1040 or other tax form available as you do this. You’ll want to make sure that the name, address, and Social Security number exactly match what is on your tax return. Pay special attention to middle initials, hyphens, street type abbreviations (St. for street, etc.). If what you enter here doesn’t match what the IRS has on record exactly, your tax payment may be delayed.
Your processor may request that you also provide your phone number and email address in case there are issues processing your payment. It’s a good idea to do this as it can help resolve problems if your payment isn’t processed.
Next, you’ll enter your payment information including the amount of the payment. Be aware that the amount of the payment you enter will be the amount that is paid to the IRS. The charge that appears on your credit card will be larger than this amount because it will include the processor’s processing fee.
After you enter your payment information, the processor will give you a chance to review your information before submitting your credit card payment. Once you’ve submitted your tax payment, you’ll see a confirmation screen. Print this out and keep it with your tax records.
In my experience, payment is usually accepted by the IRS within 2-3 days and you’ll receive a confirmation email when the IRS has accepted your payment.
How much does it cost to pay taxes with a credit card?
When you pay your federal taxes with a credit card, you’ll pay a convenience fee. These fees are charged by and vary by processor. Here are the current fees as of April 2024:
| payUSAtax | Pay1040 | ACI Payments, Inc | |
|---|---|---|---|
| Credit card payment fee | 1.82% | 1.87% | 1.98% |
| Minimum fee | $2.69 | $2.50 | $2.50 |
As you see in the table, these fees are all just under 2%. That means that you’ll earn only a marginal amount of cash back rewards
Paying state taxes with a credit card
Many states offer the ability to pay taxes with a credit card. The process is often similar to paying your federal taxes, but processing fees vary by state and processor.
The best way to find out if your state offers the option to pay state taxes with a credit card is to search for the option on your state’s department of revenue website.
Why pay taxes with a credit card?
Why should you pay your taxes with a credit card? There are several reasons why you might consider paying your
- Earnings rewards. Like any transaction, you can earn rewards when you use your credit card to pay your taxes. Your best bet is to use a card that earns more than 2% rewards on general purchases or use the payment to earn a large cash back welcome bonus.
- Financing your taxes. Paying your taxes with your credit card is one way to finance your tax payment. If you’re paying a regular interest rate on your card, getting on an IRS payment plan is likely to be far less expensive. But if you have a card that lets you finance your tax payment at 0% for 18 months or longer, using a card can provide extremely cheap short-term financing.
- Same-day payment posting. Although it may take a few days to process your tax payment, your tax payment will be considered posted to your account the same day you make it. This is not unique to credit card payments. Payments you make through IRS Direct Pay with your checking or savings account also will post the same day.
Frequently asked questions
Can you pay taxes with a credit card through TurboTax, TaxAct, or other software?
Some tax software providers offer the ability to pay your taxes with a credit card within their tax software. However, the fees they charge are higher than the IRS-authorized processors charge. Your best bet is to e-file with your favorite tax software and then use an IRS-approved processor to pay with your credit card.
Can you pay taxes with American Express?
Yes. All three of the IRS-approved processors will process payments made with Visa, Mastercard, Discover, or American Express. Some processors support additional payment networks.
Will I get charged a cash advance fee for a tax payment?
Tax payments are processed and treated as a normal purchase by most major credit card issuers. If you have concerns about whether your tax payment will be considered a cash advance, call the customer service number on the back of your card.
