You can pay federal income taxes with a credit card, but you'll pay a processing fee that often makes it more expensive than other methods
The IRS does not take credit cards directly. Instead, you must use a third-party payment processor — either Official Payments or 2nd Story Software — both of which charge a fee for the service. The fee is a percentage of what you pay, typically between 1.87% and 2.35%, and it's added on top of your tax bill. For a $5,000 payment, that's roughly $94 to $118 extra. You can pay individual income taxes this way, but the fee makes it an expensive choice unless you're earning credit card rewards that offset the cost.
The main reason people use a credit card for taxes is to hit a spending threshold for a sign-up bonus or to earn cash back or points on a large payment. If your card offers 2% cash back and the processor charges 1.87%, you come out slightly ahead. If your card offers 1% back and the fee is 2.35%, you lose money. Do the math before you commit.
Key Takeaways
- The IRS accepts credit card payments only through Official Payments or 2nd Story Software, both of which charge a percentage-based fee on top of your tax bill.
- Processing fees typically range from 1.87% to 2.35%, so a $5,000 payment costs an extra $94 to $118.
- Credit card payments make financial sense only if your card's rewards rate exceeds the processor's fee.
- You can pay federal income taxes, estimated taxes, and certain business taxes by credit card, but not all tax types are accepted.
- Payment processors charge the fee to you, not the IRS, and the fee is not tax-deductible.
Which payment processors the IRS accepts
Official Payments and 2nd Story Software are the only two processors authorized by the IRS to accept credit card payments for taxes. You cannot pay the IRS directly with your card through their website or by phone. You must go to one of these processors' websites, enter your tax information, and complete the transaction there.
Official Payments charges a fee based on the payment amount and the card type. 2nd Story Software's fee structure is similar. Both processors will show you the exact fee before you confirm the payment, so you'll know the total cost before your card is charged. The fee applies whether you use Visa, Mastercard, American Express, or Discover.
What types of taxes you can pay with a credit card
You can pay federal income tax, estimated quarterly taxes (Form 1040-ES), and certain business taxes including corporate income tax and partnership taxes. You cannot use a credit card to pay payroll taxes, excise taxes, or most other specialized tax types. If you're unsure whether your tax type is accepted, the payment processor's website will tell you during the setup process.
Self-employed people and small business owners often use credit card payments for estimated taxes, since those are due in four installments throughout the year and the amounts are often large enough to trigger a worthwhile rewards bonus.
How to pay through Official Payments or 2nd Story Software
Visit the processor's website directly — do not search for a link on the IRS site, as the IRS does not host these services. You'll need your Social Security number or employer identification number, your tax year, and the amount you want to pay. The processor will ask for your card information and billing address.
After you submit, the processor generates a confirmation number. Write this down or save the email confirmation. The payment typically posts to the IRS within one to two business days, though the processor may take longer to charge your credit card. You'll see two separate transactions: one from the processor to your card, and the payment itself will appear in your IRS account under the name of the processor, not as a direct credit card payment.
Keep your confirmation number until you file your return and verify the payment was received. If there's a discrepancy, you'll need it to contact the IRS or the processor.
When paying with a credit card costs less than it appears
If your card offers cash back or points, subtract that reward from the processor fee to find your true cost. A card offering 2% cash back on all purchases means you earn $100 on a $5,000 payment. If the fee is $94, your net cost is negative — you actually profit $6. A card offering 1% back means you earn $50, so your net cost is $44.
Some premium cards offer higher rewards on specific categories like "payments" or "everything," and some offer temporary bonus categories during certain months. Check your card's current rewards structure before you pay. The fee is not tax-deductible, so you cannot reduce your taxable income by it — you're paying it with after-tax dollars.
If you don't earn rewards that exceed the fee, paying by direct debit from your bank account, by check, or by electronic federal tax payment system (EFTPS) costs nothing and reaches the IRS just as quickly.
Why the fee exists and what it means for your decision
The IRS does not charge the fee — the payment processor does. The processor handles the transaction, fraud prevention, and customer service, and passes the cost to you. The fee is not a tax, and you cannot deduct it from your taxes. It's a service charge, similar to paying a bill online through your bank's bill-pay system.
Because the fee is substantial and non-deductible, most people should not use a credit card for taxes unless they're specifically chasing a sign-up bonus or have a high-rewards card. If you're paying taxes because you owe money and don't have cash, a credit card can create a debt problem: you're borrowing at credit card interest rates (often 18% to 25% annually) to pay a tax bill. The IRS offers payment plans with much lower interest, so explore that option first.
Payment timing and what to expect after you pay
The processor sends your payment to the IRS within one to two business days. The IRS typically posts it to your account within three to five business days after that. Your credit card company may take longer to charge your card — sometimes up to a week — so don't assume the payment is complete until you see it on your statement.
Once the IRS receives the payment, it will show in your online IRS account under "Payment History." You can check this through the IRS website using your Social Security number and filing status. If you're filing a return after paying, the IRS will match the payment to your return automatically if the amounts and dates align.
Frequently Asked Questions
Can I pay my state taxes with a credit card?
State tax agencies have their own payment systems, separate from the IRS. Some states accept credit cards directly through their tax websites; others do not. Check your state's tax agency website to see what payment methods are available. Some states charge fees similar to the IRS processors, while others do not charge at all.
What happens if I pay with a credit card and then can't pay the credit card bill?
You'll owe the credit card company interest on the balance, typically 18% to 25% annually. This is much more expensive than the IRS payment plan, which charges a setup fee and interest at a lower rate. If you cannot pay your taxes in full, contact the IRS about a payment plan before using a credit card.
Can I dispute a credit card payment to the IRS if I change my mind?
Once the processor sends the payment to the IRS, disputing it with your credit card company becomes complicated. The IRS will have received the money, and you'll need to contact the IRS to request a refund rather than dispute the charge. It's simpler to make sure the amount is correct before you submit the payment.
Do I need to report the processor fee on my tax return?
No. The fee is not deductible, and you do not report it separately on your return. It's a cost you pay to the processor, not to the IRS or as part of your tax liability.
Is it faster to pay with a credit card than by check or bank transfer?
No. Credit card payments, checks, and electronic bank transfers all reach the IRS within roughly the same timeframe — three to seven business days. Credit card payments offer no speed advantage, only the option to earn rewards if your card's rate exceeds the processor fee.