Credit Card Tax Payment Fees by Processor
The IRS has two approved processors, and their fees differ slightly. Each charges a convenience fee, which is the extra amount you pay for the option to use a card. No part of that fee goes to the IRS.
| Card type | Pay1040 | ACI Payments |
|---|---|---|
| Debit card | $2.15 flat | $2.10 flat |
| Credit card | 1.75% ($2.50 minimum) | 1.85% ($2.50 minimum) |
| Commercial card | 2.89% ($2.50 minimum) | 2.95% ($2.50 minimum) |
A commercial card is a card issued to a business. Both processors also accept digital wallets, which are apps that store your card details. Pay1040 takes PayPal and Click to Pay, while ACI Payments takes PayPal, Venmo, and Click to Pay.
How to Pay Taxes With a Credit Card
Here’s how a card payment works.
- Choose Pay1040 or ACI Payments based on the fees above.
- Pay on the processor’s website or by phone, since both accept either method.
- Enter your tax payment details and card information. You don’t need a voucher, the paper form used when mailing with a check to the IRS.
- Check the fee before you confirm the payment.
- Save your confirmation. To cancel a payment later, contact the processor.
Your card statement will list the payment as “United States Treasury Tax Payment.” The fee appears separately as “Tax Payment Convenience Fee.”
What Paying by Credit Card Costs
Because credit card fees are a percentage, they grow with your tax bill. Here’s what you’d pay in fees at each processor, based on IRS rates.
| Tax owed | Credit card fee (Pay1040) | Credit card fee (ACI Payments) | Debit card fee (Pay1040 / ACI Payments) |
|---|---|---|---|
| $1,000 | $17.50 | $18.50 | $2.15 / $2.10 |
| $10,000 | $175 | $185 | $2.15 / $2.10 |
On larger balances, a debit card costs far less than a credit card. If you run a business, card fees may be tax-deductible as a business expense.
When Paying by Credit Card Makes Sense
A credit card fits best when you can pay off the card balance quickly. Before you pay that fee, compare it with free IRS options.
Free Alternatives to Paying by Card
IRS Direct Pay and EFTPS are two IRS payment options that cost nothing to use. Either one lets you pay estimated taxes online without a convenience fee.
If you can’t pay in full, you can ask for a payment plan, also called an installment agreement. It lets you pay the IRS over time. A short-term IRS payment plan gives you up to 180 days with no setup fee.
Interest on a Carried Card Balance
If you don’t pay off your credit card in full, your card’s interest rate applies to the tax amount plus the convenience fee. Check your card’s rate and compare it with what a payment plan would cost. On an IRS installment plan, penalties and interest continue until you pay the balance in full.
Limits on Paying Taxes by Card
A few rules can affect your choice to pay by card.
- The IRS limits how often you can make card payments.
- You can’t use a card for federal tax deposits, which include employment tax payments.
- Paying when you e-file, or file electronically, through tax software costs more, for example, 2.49%–2.59%.
- Minimum fees for software card payments run $2.59 - $3.95.
