You can pay the IRS directly with a credit card, but you will pay a processing fee and the IRS will not report the payment to your card issuer as a purchase — it counts as a cash advance
The IRS accepts credit card payments through two payment processors: PayPal and 2nd Story Software. You go to the IRS website, enter your tax details, choose your card, and the processor charges you a fee (usually between 1.87% and 2.35% of the amount you pay, depending on which processor you use). The payment goes to the IRS, but your credit card company sees it as a cash advance, not a regular purchase.
This matters because cash advances typically have higher interest rates than regular purchases, start accruing interest when ready with no grace period, and may count against your credit limit differently. If you carry a balance, a cash advance can cost you significantly more than paying with a debit card or bank transfer would.
Key Takeaways
- The IRS accepts credit card payments through PayPal and 2nd Story Software, both accessible from IRS.gov, and charges a processing fee of roughly 1.87% to 2.35% of your payment amount.
- Credit card payments to the IRS are treated as cash advances by your card issuer, meaning higher interest rates, no grace period, and interest that starts accruing when ready.
- If you cannot pay in full, the IRS offers payment plans (called installment agreements) that let you pay over time without the cash advance fees and interest that come with a credit card.
- Debit cards, bank transfers, and electronic federal tax payment systems (EFTPS) do not trigger cash advance fees and are cheaper options if you have access to them.
When a credit card payment makes sense
A credit card payment to the IRS makes sense in a narrow set of situations. If you are earning rewards points or cash back on your card and the rewards rate is higher than the processing fee, you come out ahead — for example, a 2% cash back card minus a 1.87% processing fee nets you 0.13% back. This only works if you pay off the balance when ready, before any interest charges kick in.
A credit card also makes sense if you are in a situation where you need to delay payment slightly to move money into your account, and the processing fee is cheaper than a late-payment penalty from the IRS. The IRS charges a failure-to-pay penalty of 0.5% per month on unpaid tax, so if you can avoid even one month of that penalty by paying now with a card, the processing fee may be worth it.
Outside of those two cases — rewards that exceed the fee, or avoiding a larger IRS penalty — a credit card is usually the most expensive way to pay the IRS.
How to pay through the IRS website
Go to IRS.gov and search for "pay by credit card" or navigate to the payment section. You will see two processor options: PayPal and 2nd Story Software. Click the one you prefer. You will need your Social Security number or employer identification number, your tax year, and the amount you owe. Enter your credit card details and the processor will show you the exact fee before you confirm.
The payment typically posts to the IRS within one business day. You will receive a confirmation number from the processor — save this. The IRS will send you a separate receipt once the payment is recorded in their system, which can take a few days. If you are on a payment plan or have other tax matters pending, check your IRS account online (at IRS.gov under "View Your Tax Account") to confirm the payment was applied correctly.
Why the cash advance fee matters more than the processing fee
The processing fee (1.87% to 2.35%) is visible and you see it before you pay. The cash advance fee from your credit card company is often hidden in the interest rate. Most cards charge 25% to 30% annual interest on cash advances, compared to 15% to 25% on regular purchases. If you carry the balance for even a month, the interest will dwarf the processing fee you paid to the IRS.
For example: a $5,000 payment with a 2% processing fee costs $100 upfront. But if your card charges 28% annual interest on cash advances and you carry that $5,000 for three months, you will pay roughly $350 in interest alone. A debit card or bank transfer costs you nothing beyond the IRS processing fee (if any — many payment methods have no fee at all).
Payment plan as an alternative to credit card debt
If you cannot pay your tax bill in full right now, the IRS offers installment agreements that let you pay over time. You can set up a short-term plan (120 days or less) with no setup fee, or a long-term plan (more than 120 days) with a setup fee of $31 to $225 depending on how you set it up. These plans do not trigger cash advance interest rates, and you avoid the processing fee entirely.
You can request an installment agreement online through your IRS account, by phone at 1-800-829-1040, or by mail. The IRS will tell you the monthly payment amount based on what you owe and how long you want to pay. You can change the payment amount later if your situation changes. This is almost always cheaper than putting the tax bill on a credit card and carrying a balance.
Other payment methods that cost less
If you have a bank account, you can pay the IRS through the Electronic Federal Tax Payment System (EFTPS) with no fee at all. You set up an account at EFTPS.gov, link your bank account, and schedule a payment. The money comes directly from your checking or savings account, and the IRS receives it within one business day.
You can also pay by debit card through the same two processors (PayPal and 2nd Story Software) that handle credit cards. The processing fee is the same, but your card issuer will not treat it as a cash advance — it comes straight from your account like a check would. If you have the money in your account now, a debit card or bank transfer is almost always cheaper than a credit card.
What happens if you miss a payment or need to change your plan
If you set up a payment plan and miss a payment, the IRS will send you a notice. You have the right to reinstate the agreement by paying the missed amount within 30 days. If you do not, the agreement ends and the full balance becomes due. Contact the IRS when ready if you cannot make a payment — they can modify your plan or work out a different arrangement.
If your situation improves and you want to pay off the tax bill faster, you can make extra payments at any time without penalty. There is no prepayment fee or early-payoff penalty with the IRS. You can also change your monthly payment amount by contacting the IRS or updating your account online.
Frequently Asked Questions
Does paying the IRS with a credit card hurt my credit score?
A cash advance can lower your score temporarily because it increases your credit utilization (the amount of available credit you are using) and may be reported as a separate account type. The impact is usually small and temporary if you pay it off quickly. Carrying a balance will hurt your score more than the initial cash advance does.
Can I use a rewards credit card to pay my taxes and come out ahead?
Only if your rewards rate is higher than the processing fee and you pay off the balance when ready. A 2% cash back card minus a 1.87% processing fee nets you 0.13%. Most cards do not offer rewards high enough to beat the fee, and if you carry a balance, the interest will erase any rewards you earned.
What if the IRS payment processor website is down or not working?
You can pay by phone by calling 1-800-829-1040 and speaking to an IRS representative, who can process a credit card payment over the phone. You can also mail a check or set up an installment agreement to spread the payment over time. The IRS website is usually available, but these options exist if it is not.
Will the IRS accept a payment plan if I pay with a credit card?
The IRS does not require you to pay in full upfront. You can request a payment plan regardless of how you pay. If you use a credit card now and then set up a plan for the remaining balance, you will owe interest and penalties on the unpaid portion, but the plan itself has no credit card fees.
Can I pay someone else's IRS bill with my credit card?
No. The IRS payment system requires the taxpayer's Social Security number or employer identification number, and the payment must come from that person's account or with their written authorization. You cannot pay another person's tax bill directly through the IRS website.