What You Pay When You Use a Credit Card for Taxes

When you pay federal income taxes with a credit card, you do not pay the IRS a fee — but you do pay a payment processor fee to the company that handles the transaction. That fee typically ranges from 1.87% to 2.35% of the amount you are paying, depending on which processor you use. If you pay $5,000 in taxes with a credit card, expect to pay somewhere between $94 and $118 on top of that.

The IRS itself charges nothing for credit card payments. The fee goes to the third-party payment processor — either Worldpay, Global Payments, or ACI Payments — that the IRS contracts with to accept credit cards. Each processor sets its own rate, and those rates change periodically. You choose which processor to use when you make your payment, and the fee is shown to you before you confirm the transaction.

State income tax payments work differently. Some states charge no fee at all. Others charge a flat fee, a percentage fee, or both. A few states do not accept credit cards for tax payments at all. The fee structure depends entirely on your state and the payment method you choose.

Key Takeaways

  • Federal tax payments by credit card cost between 1.87% and 2.35% in processor fees, which you pay directly — the IRS charges nothing.
  • You see the exact fee amount before you confirm payment, so you know the total cost before your card is charged.
  • State tax fees vary widely: some states charge nothing, others charge a flat fee or percentage, and a few do not accept credit cards.
  • The fee is worth paying only if you are earning credit card rewards that exceed the cost, or if you need the float time before the charge posts.

Which Processors Handle Federal Tax Payments and What They Charge

The IRS contracts with three payment processors. As of the most recent update, Worldpay charges 1.87%, Global Payments charges 2.35%, and ACI Payments charges 2.00%. These rates can change, so the processor's website will show you the current rate before you pay.

You access these processors through the IRS payment portal at IRS.gov/payments. When you enter your payment amount, the system shows you all three options side by side with the exact fee for each one. You then choose which processor to use. The lowest-cost option is always shown first, but you are free to pick any of them.

The fee is calculated on the full amount you are paying, including any estimated tax payments, balance-due amounts, or extension payments. There is no minimum payment amount, but paying a very small amount means the percentage fee takes up a larger share of what you are sending.

How State Tax Credit Card Fees Work

State income tax payment fees are set by each state individually. Some states — including New York, California, and Texas — charge no fee at all for credit card payments. Others charge a flat fee (often $2 to $5) regardless of the amount you pay. Still others charge a percentage fee similar to federal, usually between 1.5% and 2.5%.

A few states charge both a flat fee and a percentage. For example, a state might charge $2 plus 1.75% of the payment amount. Some states also offer different fee structures depending on whether you pay through their official tax portal or through a third-party payment service.

To find your state's fee structure, go to your state's department of revenue or tax authority website and search for "credit card payment" or "payment methods." The fee will be listed before you complete the transaction, just as it is with federal payments.

When Paying Tax by Credit Card Makes Financial Sense

Paying taxes with a credit card costs money, so it only makes sense if you get something back. The most common reason is credit card rewards. If your card earns 2% cash back on all purchases, and the processor fee is 1.87%, you come out slightly ahead. If your card earns 3% or more on certain categories (like "payments" or "everything"), the math works even better in your favor.

The second reason is timing. If you do not have the cash to pay taxes right now but will have it in a few weeks, charging the payment to a credit card buys you that time. You can then pay off the card balance when the money arrives. This only works if you can pay the card in full before interest charges kick in, and if the interest rate you would pay is less than the processor fee.

In most cases, paying taxes by credit card costs more than it saves. If your card does not earn rewards, or if the rewards are less than the fee, you are better off paying by bank transfer, check, or direct debit — all of which are free.

How to Pay Federal Taxes by Credit Card

Go to IRS.gov/payments and select "Pay Now." You will see options for different payment methods. Choose "Credit or Debit Card." Enter the amount you want to pay and your tax year. The system will then show you the three processors and their current fees.

Select the processor you prefer. You will be taken to that processor's find payment page, where you enter your card details, billing address, and the tax year and type of payment (such as 1040 balance due or estimated tax). Review the total amount including the fee, then confirm the payment.

The charge will post to your credit card within one to two business days. The IRS will receive the payment within the same timeframe. You will receive a confirmation number when ready after the transaction completes — save this for your records.

How to Pay State Taxes by Credit Card

Visit your state's department of revenue website. Most states have a dedicated payment portal, often labeled "Pay Your Tax" or "Make a Payment." Look for the option to pay by credit card. Some states route you through a third-party processor; others use their own system.

Enter your state ID number (usually your Social Security number or business tax ID), the tax year, and the amount. The system will show you the fee before you proceed. Enter your card information and confirm the payment. You will receive a confirmation number and a receipt.

Processing times vary by state, but most credit card payments post within two to five business days. Check your state's website for the specific timeline and whether there are any restrictions on which card types they accept.

Free Alternatives to Paying Taxes by Credit Card

Bank transfer (ACH debit) is free and takes one to three business days. You authorize the IRS or your state to pull the payment directly from your bank account. This is the cheapest option if you have a bank account and can wait a few days.

Check or money order is also free. Mail it to the address listed on your tax form or your state's website. Processing takes longer — usually two to three weeks — but there is no fee.

Electronic Federal Tax Payment System (EFTPS) is a free service run by the U.S. Department of the Treasury. You can schedule payments in advance and pay by bank transfer at no cost. It is especially useful if you make quarterly estimated tax payments.

For state taxes, most states offer free payment by bank transfer or check. Some offer payment plans if you cannot pay the full amount at once — these are also free, though they may include interest on the unpaid balance.

Frequently Asked Questions

Can I deduct the credit card fee as a tax expense?

No. The IRS does not allow you to deduct credit card processing fees paid to the government as a business expense or itemized deduction. The fee is a cost of paying your tax bill, not a deductible expense. However, if you are self-employed and use a credit card fee as part of your business accounting, you may want to consult a tax professional about your specific situation.

What if I pay my taxes late — does the fee still explore?

Yes. The processor fee applies to any credit card payment, whether you pay on time or late. Late payments will also include penalties and interest charged by the IRS or your state, which are separate from the processor fee. The processor fee is calculated only on the tax amount itself, not on penalties or interest.

Do I earn rewards on the processor fee itself?

Yes. Your credit card rewards are calculated on the total amount charged, including the processor fee. So if you pay $5,000 in taxes and the fee is $94, your card will earn rewards on the full $5,094. This is one reason why high-rewards cards can make tax payments worthwhile.

Can I split my tax payment across multiple credit cards?

No. The IRS and most state systems require you to complete each payment as a single transaction. You cannot split one payment across two cards in a single transaction. However, you can make multiple separate payments if you want to use different cards — each payment will incur its own fee.

What happens if my credit card payment fails or is declined?

If the payment is declined, the transaction will not go through and you will not be charged. The IRS or your state will notify you of the failure. You can then try again with a different card or payment method. If the payment fails after the tax important date, you may owe penalties and interest, so contact the IRS or your state when ready to resolve it.