The IRS does not charge a fee, but the payment processor does
The Internal Revenue Service itself charges nothing to accept your tax payment by credit card. However, the companies that process credit card payments on the IRS's behalf do charge a fee, and you pay it. The fee is a percentage of your payment amount — typically between 1.87% and 2.35%, depending on which processor handles your transaction.
This means if you owe $5,000 in taxes and pay by credit card, you might pay an additional $94 to $118 just to use that payment method. The exact fee depends on which of the IRS's approved payment processors you choose, and the fee applies whether you are paying federal income tax, self-employment tax, or any other tax the IRS collects.
Key Takeaways
- Credit card payment fees range from 1.87% to 2.35% of your payment amount and go to the payment processor, not the IRS.
- The IRS approves only a small number of payment processors, and each one sets its own fee rate within that range.
- You can see the exact fee before you complete the payment, so you know the total cost before your card is charged.
- Paying by bank account transfer through IRS Direct Pay costs nothing and takes the same amount of time as a credit card payment.
Which processors the IRS uses and what each one charges
The IRS contracts with a handful of approved payment processors. As of now, the main ones are Worldpay, ACI Payments, and Official Payments. Each processor sets its own fee within the IRS-approved range, so the cost varies depending on which one you use when you go to pay.irs.gov or IRS2Go (the official IRS mobile app).
When you start a payment on the IRS website, the system shows you which processor is available and what that processor's fee will be for your specific payment amount. You see the dollar amount of the fee before you enter your card details, so you can decide whether to proceed or choose a different payment method.
The fee is not negotiable and does not change based on your card type, your bank, or your credit score. A Visa, Mastercard, American Express, or Discover card all face the same percentage fee from the same processor.
How the fee is calculated and when you pay it
The fee is calculated as a percentage of your tax payment, not a flat amount. If the processor's rate is 2.0% and you are paying $10,000, the fee is $200. If you are paying $1,000, the fee is $20.
You pay the fee at the time you make the payment. The IRS does not add it to your tax bill or bill you separately. Instead, you authorize a charge to your credit card for the tax amount plus the fee in a single transaction. For example, if you owe $5,000 and the fee is $100, your card is charged $5,100 total.
The fee does count toward your credit card's rewards or cash back if your card offers them, so you may earn points on the full amount including the fee. However, the fee itself is not tax-deductible for most people, even though it is a cost of paying your taxes.
Why people use credit cards despite the fee
The fee is real money out of your pocket, but some people pay it anyway because they are in a tight spot. If your tax payment is due in two days and you do not have the cash in your bank account, a credit card gives you a few weeks before the bill is due. That float can be worth the fee if it keeps you from missing the important date.
Some people also use credit cards to earn rewards points or cash back on large payments. If your card gives you 2% cash back and the fee is 1.87%, you come out slightly ahead. This math only works if you pay off the card when ready — if you carry a balance and pay interest, the fee becomes much more expensive than it looks.
A third reason is that some people do not have a bank account or do not want to give the IRS direct access to their checking account. For those people, a credit card is the only option besides paying by check or money order in person.
Free alternatives that take the same amount of time
IRS Direct Pay is free and works just like the credit card option — you go online, enter your information, and authorize a payment. The difference is that Direct Pay pulls money straight from your bank account instead of charging a card. There is no fee, no percentage, nothing. The payment takes the same number of business days to process as a credit card payment.
If you do not have a bank account, you can pay by check or money order by mail, or you can pay in person at a bank or post office that accepts tax payments. These methods are also free but take longer because of mail delivery time.
The Electronic Federal Tax Payment System (EFTPS) is another free option if you are self-employed or a business owner. You set up an account, and you can schedule payments in advance. Like Direct Pay, EFTPS pulls from your bank account and charges no fee.
When the fee might be worth paying
The fee makes sense in a few specific situations. If you are paying taxes with a business credit card that offers 3% cash back on all purchases, and the processor fee is 2.0%, you net 1% on the transaction. That is real money on a large payment.
If you are short on cash and need the payment important date extended, using a credit card buys you time. You pay the fee, charge the taxes to your card, and then you have 20 to 30 days before your card bill is due. During that time, you can earn the money to pay off the card. This only works if you actually have a plan to pay the card off — carrying a balance and paying interest will cost far more than the fee.
If you are close to meeting a credit card spending threshold for a bonus (such as "spend $5,000 in three months, get $200 back"), a large tax payment might push you over the edge. Again, the math only works if the bonus is larger than the fee.
How to find the exact fee before you pay
Go to pay.irs.gov or open the IRS2Go app. Enter your tax year, Social Security number or employer ID number, and the amount you want to pay. The system will show you which payment processor is available and display the exact fee in dollars and cents before you enter your card information.
You can see the fee for each available processor if more than one is listed. Compare them and choose the one with the lowest fee, or choose a different payment method altogether. You are not locked in until you authorize the charge.
If you are paying on behalf of a business, the same process applies — the IRS website shows the fee before you commit.
Frequently Asked Questions
Can I deduct the credit card fee on my taxes?
For most people, no. The IRS treats the fee as a personal expense, not a tax-related business expense. However, if you are self-employed and paying business taxes, you may be able to deduct it as a business expense. Talk to a tax professional about your specific situation.
Does the fee change if I pay early or late?
The fee percentage does not change based on when you pay. It is the same whether you pay on April 15 or months earlier. However, if you pay late, you will also owe penalties and interest on the unpaid tax amount — the credit card fee is separate from those charges.
What if I use a debit card instead of a credit card?
Debit cards are treated the same as credit cards by the IRS payment processors. You will pay the same percentage fee whether you use a debit card, credit card, or prepaid card. The fee applies to any card-based payment.
Can I split my payment between a credit card and a bank account?
No. Each payment must go through one method only. You can make multiple payments using different methods, but each individual payment has to be all credit card or all bank account. If you want to split the payment, you would make two separate transactions and pay the fee on whichever portion you charge to the card.
Is the fee the same for state taxes?
No. State tax agencies set their own rules and fees. Some states charge no fee for credit card payments, some charge a fee similar to the IRS, and some do not accept credit cards at all. Check your state's tax website to see what payment methods are available and what they cost.