January 13, 2025: If you are a United States taxpayer, you can pay taxes using your credit card. Whether you pay your taxes in April or make estimated tax payments throughout the year, paying taxes with a credit card can provide a consistent opportunity to earn credit card rewards with a new cardmember welcome bonus or take advantage of 0% financing on a new card.
In this complete guide to paying your taxes by credit card, we’ll walk you through how paying taxes by credit card works, why you might want to do it, the costs, and even show you step-by-step how the process works with each of the IRS’s official processor partners.
Here’s everything you need to know about paying taxes with a credit card.
In this article…
Avoid scams: Be skeptical about contacts purporting to be from the IRS
Before we get started talking about making tax payments with credit cards, we think it’s important to remind our readers that tax time can provide a huge windfall to scammers. Here are a few things to remember:
- Initiating contact with the IRS is your best bet. If in doubt, go to the IRS.gov website and find official contact information for the agency.
- The IRS typically won’t initiate contact with you via phone, email, or in-person. If the IRS needs to contact you about your tax return, payment, or an investigation, it will typically initiate contact via postal mail. (See the IRS article on how to know you’re talking to the IRS.)
- The IRS will never demand payment via gift card or prepaid debit cards. Many scammers impersonating the IRS demand payment via gift card or debit card because these types of transactions are difficult or impossible to reverse.
Additionally, it’s a good idea to be skeptical of links on non-IRS websites. You’ll find the links on this page go directly to the IRS website and its authorized payment providers.
How paying taxes with a credit card works
The IRS does not directly accept credit cards for payments, but it uses a handful of third-party service providers to enable credit card payments.
When you use one of these third party services to pay your taxes, the service will charge your credit card and transmit your taxpayer information along with your payment to the IRS. All of the third-party services charge a fee for using a credit card, which varies by processor and (sometimes) type of credit card. (We have more on these fees later.)
Your payment will typically be considered received by the IRS on the date you make it, even though the IRS doesn’t receive your payment from the third-party processor (and you won’t see it posted to your IRS account) for a few days.
Why pay your taxes using a credit card?
You can pay your taxes directly from your bank account, by wire transfer, by mail, or by credit card. Here are the most common reasons why you might want to pay your taxes with a credit card:
- Credit card rewards. If you can earn rewards in excess of the processing fee, you’ll actually make a little bit of money when paying your taxes with the credit card. Using a 2% cash back credit card or a card that earns even greater rewards can mean you make money paying your taxes.
- Getting a big spend bonus. Some credit cards offer perks if you spend a certain amount on them during a year. Depending on the credit card, you might be able to use a credit card to earn a free hotel night, unlimited airport lounge access, or a boost to your airline or hotel elite status.
- Spending for a sign-up bonus. Many credit cards offer new cardmembers a bonus after opening a new card and spending a certain amount on the card within a certain amount of time. A tax payment can be an easy way to meet this spending requirement, possibly allowing you to earn a huge bonus.
- Interest-free financing. Many credit cards offer 0% APR financing for purchases for up to 21 months. Using a credit card with a promotional financing APR can give you almost two years to pay off your tax bill, interest free.
- No worries about lost mail or delayed payments. Paying by credit card ensures that your payment won’t get lost in the mail. You’ll be able to confirm the exact date that the IRS will consider your payment “received” during the payment process.
When should you avoid pay taxes with a credit card?
While there are plenty of good reasons to pay taxes with a credit card, there are also a handful of cases when you should avoid paying with a credit card:
- If you cannot afford your taxes. The IRS offers payment plans which will almost certainly cost less than you’d pay if you finance your tax bill at regular credit card interest rates.
- You are currently paying interest on a credit card. Earning rewards can sound great, but if you’re currently paying interest on a credit card, you won’t enjoy an interest-free grace period. That means you’ll also pay interest on new charges, including your tax payment.
- You can’t earn rewards in excess of the processing fee. If you don’t have a card that earns 2% or greater rewards and you aren’t working toward a credit card sign-up bonus, you’re probably paying more in fees than you’re getting back in rewards. In this case, paying by check or direct bank transfer is better.
Do I have to use a third party payment processor?
If you want to pay with a credit card, yes. The IRS does not accept credit card payment directly. Instead, it partners with two independent processors to process credit card tax payments. These processors both charge a fee to process your payment by credit card.
There are only authorized processors that the IRS lists on its website:
You might find other third party processors online, but it’s best to stick to the two authorized processors above. Any other unauthorized payment processors are likely to either have higher fees or be an outright scam.
Which payment processor is best?
We’ve used both Pay1040 and ACI Payments, Inc. to make tax payments. In practice, we’ve found both services to be reliable and equally easy to use. Practically, most of the different comes down to the fees.
Pay1040.com is best if you are using a Discover, Mastercard, or personal Visa card, as the processor’s fees for these types of cards are lower than ACI Payments.
ACI Payments, Inc. is best if you need to use an American Express, as its fees for this type of card are lower.
Additionally, ACI Payments, Inc. likely won’t work if you want to use a small business credit card to pay your taxes. If you need (or want) to use a small business credit card to pay your taxes, you’ll need to use Pay1040.
What is the cost to pay federal taxes with a credit card?
As of publication, here’s what each of the payment processors was charging to process tax payments with a credit card.
| Pay1040.com | ACI Payments, Inc. | |
|---|---|---|
| Advertised rate for credit cards | 2.89% ($2.50 minimum) (1.75%, minimum $250 is shown on the IRS website.) | 1.85% (Minimum fee $2.50) |
| American Express (Personal) | 2.81% | 1.85% |
| American Express (Business) | 2.81% | Not accepted for personal tax payments. |
| Discover (Personal) | 1.75% | 1.85% |
| Mastercard (Personal) | 1.75% | 1.85% |
| Mastercard (Business) | 1.75% | Not accepted for personal tax payments. |
| Visa (Personal) | 1.75% | 1.85% |
| Visa (Business) | 2.81% | Not accepted for personal tax payments. |
How to pay Federal taxes using Pay1040.com: Step by step
To pay your taxes using a credit card through Pay1040.com, go to the Pay1040 website (https://www.pay1040.com/) and click on “Pay Personal Taxes”. You can also pay your business taxes via credit card by click on “Pay Business Taxes”.
Step 1: Enter your tax form and payment amount.
After clicking “Pay Personal Taxes” you’ll be taken to a screen where you’ll be asked for your tax category (personal or business), tax form, tax year, and payment amount. If you filed a 1040 form and are paying the tax you owe as shown on that form, select “Form 1040 Series” and enter your payment amount.
Step 2: Taxpayer information
Enter your taxpayer information, including your Social Security Number or ITIN, your name, address, and date of birth. Be sure to enter your Social Security Number, name, birthdate, and address exactly as they appear on your tax forms. Additionally, you can provide an email address to receive an email confirmation of your tax payment.
Step 3: Payment information
Enter your credit card information on the next screen. Your billing address will be pre-populated with the information you provided when you entered your taxpayer information. If this doesn’t match the information on file with your credit card issuer, you can change it on this screen.
Step 4: Review and submit your payment
On the fourth screen, you’ll see all of the information that you entered on the previous screens, with the first five digits of your Social Security number blocked out. Be sure to verify that the information on this screen is correct and matches the information that you used to file your taxes. Any differences between the information on this screen and what the IRS has on file could prevent your payment from posting properly.
Pay special attention to the convenience fee and payment amount. At time of publication, Pay1040 was charging different amounts based on the type of card you use. In particular, American Express cards and Visa business cards may be charged a higher fee.
If everything looks good, click to accept the terms and conditions and scroll down to the “Process Payment” button at the bottom of the screen.
Step 5: Confirmation
If your payment processes correctly, you’ll see a confirmation screen showing a summary of your transaction. You should print this for your records. If you provided your email address earlier in the process, you will also receive a conformation via email.
How to pay using ACI Payments, Inc.: Step by step
On the ACI Payments federal tax payment website you’ll first need to select which type of tax payment you are making. For most people who are making their annual tax payment and file a form 1040, you’ll select “1040 Current Tax Return – Tax Year 2024”.
Step 2: Enter payment amount and credit card information
On the next screen, enter your payment amount and your credit card information. Scroll to the bottom of the page and click on “Accept Terms” to continue.
Step 3: Enter your taxpayer information
The next screen will ask you to enter your taxpayer information, including name, Social Security Number, address, and phone number. Additionally, you can enter your email address to receive a payment confirmation via email.
You’ll also be able to review the information you entered, the amount of your payment, and the amount of your payment fee at the bottom of the page.
Once you’ve reviewed that your payment is correct, you can click on “Submit Payment” at the bottom of the page to process your tax payment.
Step 4: Confirmation
After clicking on “Submit Payment” ACI Payments will process your credit card payment. Assuming everything goes through, you’ll see a confirmation on the following screen and, if you provided your email address, you’ll receive an email confirmation as well.
Within a few days after processing your credit card payment, you should see your payment reflected in your account on the IRS website.
Paying state taxes with a credit card
Many states offer the ability to pay taxes with a credit card. The process is often similar to paying your federal taxes, but processing fees vary by state and processor.
The best way to find out if your state offers the option to pay state taxes with a credit card is to search for the option on your state’s department of revenue website.
Our perspective: How we leverage tax payments for rewards
Making tax payments with a credit card offers an excellent opportunity to earn additional credit card rewards and have natural spending for sign-up bonuses. And I take full advantage.
Since I run a business, I make estimated tax payments, which means I make multiple large tax payments throughout the year. Generally, I try to make sure that every tax payment goes on a card that I’m earning a welcome bonus on and I time my credit card applications so that I can use my tax payments to earn these valuable welcome bonuses.
If I’m not earning a welcome bonus, I’ll typically put my tax payment on my Bank of America Unlimited Cash Rewards card, which earns 2.62% cash back, since I am a Preferred Rewards with Platinum Honors member.
For 2025 and beyond, I’m eyeing the 4% cash back offered by the U.S. Bank Smartly Visa card for my tax payments, though that will still be less than I’m earning from sign-up bonuses and it would require me to move $100,000 of investments to U.S. Bank.
Bottom line: You can pay taxes with a credit card
The IRS partners with two payment processor to provide you the option to pay your taxes with a credit card. This can be a good option to earn rewards, meet a spending threshold for a sign-up bonus, or finance your tax payment with a 0% promotional APR.
