Yes, you can pay federal income taxes with a credit card, but the IRS charges a processing fee that often makes it more expensive than other payment methods
The Internal Revenue Service accepts credit card payments for federal income tax bills through third-party payment processors. You can pay your balance due, estimated tax payments, or taxes owed from an amended return. The catch is that the processor charges a convenience fee — typically between 1.87% and 2.35% of the amount you pay — which you must pay on top of your tax bill itself. That fee is not deductible.
State tax agencies have their own rules. Some states accept credit cards for income tax payments; others do not. A few states that do accept them charge their own fees, while others do not. You will need to check your state's tax department website to see what payment methods are available and what the costs are.
Key Takeaways
- The IRS processes credit card tax payments through three approved vendors: Worldpay, Paymetrics, and Official Payments, each charging a different fee percentage.
- The convenience fee you pay to use a credit card is separate from your tax bill and is not tax-deductible.
- You should only use a credit card to pay taxes if you can pay off the balance immediately, because the interest you would owe on a revolving balance will exceed the convenience fee.
- State tax payments have different rules and fees depending on which state you live in; check your state tax department's website before paying.
- If you cannot pay your full tax bill, the IRS offers payment plans that do not require a credit card and charge lower fees than a convenience fee plus credit card interest.
How the IRS processes credit card tax payments
When you pay federal taxes by credit card, you go through one of three IRS-approved payment processors: Worldpay, Paymetrics, or Official Payments. You do not pay the IRS directly. Each processor charges its own fee, which ranges from about 1.87% to 2.35% of your payment. The processor adds this fee to your total charge and bills your credit card for both the tax amount and the fee together.
You can find the current fee for each processor and links to their payment portals on the IRS website under "Pay by Credit or Debit Card." The fees change periodically, so check the IRS site before you pay to see which processor has the lowest rate that day. The difference between 1.87% and 2.35% can be significant on a large tax bill — on a $10,000 payment, that is a difference of $48.
The payment is processed immediately, and the IRS receives the funds within one to two business days. Your credit card company will report the charge as a regular purchase, not as a tax payment, so it counts toward your credit utilization and may trigger rewards if your card offers them on all purchases.
When paying taxes with a credit card makes financial sense
Paying taxes with a credit card only makes sense if you can pay off the entire balance before interest accrues. If you carry a balance, the interest rate on your card — typically 15% to 25% annually — will quickly exceed the convenience fee. On a $5,000 tax payment with a 2% fee, you pay $100 upfront. But if you carry that $5,100 balance for three months at 20% interest, you will owe an additional $255 in interest charges. The total cost becomes $355 instead of $100.
One scenario where a credit card can make sense is if you are close to meeting a spending threshold for a sign-up bonus or a category bonus. If your card offers 5% cash back on all purchases and you are paying $10,000 in taxes, you would earn $500 in rewards. Subtract the $200 convenience fee, and you net $300. But this only works if you pay the balance immediately and if the card does not exclude government payments from bonus categories — some cards do exclude them.
Another situation is if you have a 0% introductory APR period that extends beyond the time you need to pay off the balance. If your card offers 0% APR for 12 months and you can pay the tax bill within that window, the convenience fee is your only cost. This is rare, but it is worth checking your card's terms if you are considering this route.
State tax payments and their fees
State income tax rules vary widely. Some states accept credit cards for income tax payments; others accept them only for certain types of payments, like estimated taxes. A few states do not accept credit cards at all for income tax.
States that do accept credit cards often charge their own convenience fees, which can be higher or lower than the federal IRS fees. Some states charge a flat fee per transaction; others charge a percentage. A few states do not charge a fee at all. You need to visit your state's tax department website or call their payment line to find out what methods are available and what the cost is. Do not assume that because the IRS charges a fee, your state does too.
If you are paying property taxes, sales taxes, or other state or local taxes, the rules are different again. Some local tax collectors accept credit cards; many do not. Your county or city tax assessor's office can tell you what payment methods they accept.
The IRS payment plan as an alternative to credit card payments
If you cannot pay your full tax bill at once, the IRS offers a payment plan called an installment agreement. You can set up a short-term plan (120 days or less) or a long-term plan (more than 120 days). The IRS charges a setup fee — currently $31 to $225 depending on how you set up the plan — and a monthly interest rate on the unpaid balance.
The monthly interest rate is lower than most credit card rates. As of 2024, the IRS charges interest at the federal short-term rate plus 3%, which is typically around 8% to 10% annually. That is roughly half the rate of a typical credit card. You also avoid the convenience fee that a payment processor charges.
You can set up an installment agreement online through the IRS website, by phone, or by mail. The online option is the fastest and charges the lowest setup fee. If you set up the plan online and pay by direct debit from your bank account, the IRS charges $31. If you pay by credit card or other method, the fee is higher.
How to pay federal taxes by credit card step by step
Go to the IRS website and find the "Pay by Credit or Debit Card" section under payment options. You will see links to the three approved payment processors with their current fees listed. Choose the processor with the lowest fee for your payment amount.
Click the link to the processor's website. You will enter your tax information, including your Social Security number or employer identification number, the tax year, and the amount you want to pay. The processor will show you the convenience fee before you confirm the payment. Enter your credit card information and complete the transaction.
You will receive a confirmation number immediately. Keep this number for your records. The IRS will receive the payment within one to two business days. You do not need to file a separate form or send anything to the IRS — the processor handles the reporting.
If you are paying an estimated tax payment or a payment on an amended return, the process is the same. The processor will ask you to specify which type of payment you are making, and you will enter the relevant tax year and form number.
What happens if you cannot afford the convenience fee
If the convenience fee is a hardship, do not pay by credit card. The IRS offers several other payment methods that do not charge a fee: direct debit from your bank account, electronic federal tax payment system (EFTPS), or a check or money order by mail. Direct debit is the fastest and most secure.
If you cannot afford to pay the full amount at all, set up an installment agreement instead. The setup fee is lower than a credit card convenience fee on most payments, and the interest rate is lower than credit card interest. You can also request a short-term extension (up to 120 days) to pay without setting up a formal plan, though this does not stop interest from accruing.
Frequently Asked Questions
Can I deduct the convenience fee I pay to use a credit card for taxes?
No. The convenience fee is a cost of paying, not a tax expense. It is not deductible on your federal return. Some states may have different rules, so check with your state tax department if you live in a state with income tax.
Do I get a receipt or confirmation that the IRS received my payment?
Yes. The payment processor gives you a confirmation number immediately after you complete the transaction. The IRS will also send you a notice of payment received, usually within two weeks. Keep the confirmation number until you receive the IRS notice.
What if I pay by credit card and then find out I overpaid my taxes?
The IRS will issue a refund to you, not to your credit card company. You will receive the refund by check or direct deposit, depending on how you filed your return. The refund does not offset the convenience fee you paid.
Can I pay estimated taxes by credit card?
Yes. The process is the same as paying a regular tax bill. You go through one of the three approved processors and specify that you are paying an estimated tax payment. The processor will ask you for the tax year and the amount.
Is there a limit to how much I can pay by credit card?
The IRS does not set a limit, but individual payment processors may have their own limits. Check the processor's website before you attempt a large payment. Some processors also limit the number of transactions you can make in a single day.