Paying taxes is rarely something people look forward to, but if you strategically use credit cards to pay taxes, it can serve a purpose beyond meeting your legal obligations.
Many people wonder whether they can (or should) pay taxes with a credit card. The short answer is yes—but it depends. You can earn rewards or meet spending requirements, but fees and interest charges can eat away those gains. IRS provides a page where you can see the current options.
This post will walk you through everything you need to know.
Pro tip: If you’re unsure, use this formula:
(Reward % × Payment Amount) – (Fee % × Payment Amount)
If the result is positive, pay with a card. If not, stick to traditional methods.
Tax Filing and Payment Deadlines
Note: An extension to file is not an extension to pay. You must still pay your taxes by April 15 to avoid penalties and interest.
For tax year 2024:
Tax filing deadline: April 15, 2025
Tax payment deadline: April 15, 2025
Extension to file: File Form 4868 by April 15 to extend the deadline to October 15, 2025
How to Pay Taxes with a Credit Card
Pro Tip:
You can make two credit card payments per tax type per year per SSN or ITIN through each IRS-authorized processor. If you have a large tax bill, you can split it across two cards or across different processors to maximize rewards or meet multiple bonus requirements.
Different processors offer nearly identical services, but the small differences in fees can impact the total cost of your payment. Carefully choosing the processor based on the card type you use can help reduce what you pay in added charges. Also consider whether you’re using a personal or business card, as business payments often incur higher fees. As of 2025, the two main IRS-authorized processors for credit card payments are:
- Pay1040
- ACI Payments, Inc.
Card networks accepted: Visa, Mastercard, Discover, American Express
Cash payments: Both processors support VanillaDirect locations for cash payments
| Payment Processor | Payment Type | Fee | Minimum Fee | Cash Option | Digital Wallets |
|---|---|---|---|---|---|
| Pay1040 | Personal debit card | $2.15 flat | – | Yes ($1.50) | PayPal, Click to Pay |
| Personal credit card | 1.75% | $2.50 | Yes | ||
| Business credit/debit card | 2.89% | $2.50 | Yes | ||
| ACI Payments | Personal debit card | $2.10 flat | – | Yes ($1.50) | PayPal, Click to Pay, Venmo |
| Personal credit card | 1.85% | $2.50 | Yes | ||
| Business credit/debit card | 2.95% | $2.50 | Yes |
Real-World Example: Is It Worth It?
Let’s look at a few sample calculations to evaluate if using credit cards for taxes is worth the processing fees. These examples use real credit card rewards from our best Best Credit Cards page.
Assumptions:
- Tax amount: $5,000
- No interest or late payment
- Paid in full by due date
- Rewards are either cash back or transferable points valued at 1.5–2.0 cents each
Sample Credit Cards and Calculations
Citi Double Cash Card
- 2% cash back
- Fee (Pay1040): 1.75% of $5,000 = $87.50
- Cash back: $100
- Net gain: $12.50
American Express Gold Card
- 4x points at restaurants, 3x on flights, 1x on taxes
- Assume 1x: 5,000 MR points
- Value per point: ~1.8 cents
- Reward value: $90
- Fee (ACI Payments): 1.85% of $5,000 = $92.50
- Net loss: -$2.50
Chase Sapphire Preferred (sign-up bonus)
- Sign-up bonus: 100,000 points after $5,000 spend
- Value: ~$2000
- If you use tax payment to meet minimum spend:
- Fee on $5,000 (Pay1040): $87.50
- Effective bonus value: ~$1912.50
- Net gain: Very high value if no other large expenses
When It Makes Sense
Paying taxes with a credit card may be worth it if:
- You are meeting a minimum spend for a large sign-up bonus
- Your card earns more in rewards than the fee costs
- You need a short-term cash flow delay, and you will pay off the balance in full
In the above scenarios, using a card like Citi Double Cash, Chase Freedom Unlimited, or a new card with a sign-up bonus can make financial sense.
| Situation | Recommended Action |
|---|---|
| Need to hit bonus spend | Use credit card (calculate reward value) |
| High-reward card (2%+) | Use credit card via low-fee processor |
| Can’t pay balance in full | Avoid—use debit or IRS Direct Pay |
| Business expense | Consider if fee is deductible and budget allows |
| Want to delay payment a few weeks | Use 0% APR card or grace period carefully |
When to Avoid It
If you’re using the card as a short-term loan without a payoff plan, the cost can spiral. Fees plus interest could make this one of the most expensive ways to settle your tax bill. It’s also not ideal if you’re close to maxing out your credit limit or trying to protect your credit score.
- You will not pay the balance in full (interest will erase any rewards)
- Your card earns less than 2% back on general spend
- Your credit limit is low and this charge will spike your credit utilization
- You’re using a business card and face the higher 2.89–2.95% processing fee
Tax Deductibility of Fees
For most individuals, the processing fee is simply part of the cost. However, business owners may be able to offset it as a deductible expense, depending on how the card is used. Always consult a tax advisor before classifying it as a business deduction.
- Individuals: Credit card fees are not deductible
- Businesses: If paying business taxes with a business card, the fee may be deductible as a business expense—consult a tax professional
Other Benefits: Float and Protections
Paying with a credit card allows you to:
- Delay cash outflow for ~21–28 days (grace period)
- Consolidate your tax payment into monthly budgeting if necessary (not recommended unless 0% APR and structured plan)
Alternatives to Credit Cards
If your card isn’t offering enough value or you’re worried about the fees, free or low-cost options are available. The IRS makes it easy to pay directly or set up a payment plan. Some taxpayers prefer using their checking account to avoid third-party involvement.
If the credit card fees outweigh the value, consider:
- Bank transfer (free via IRS Direct Pay)
- Personal debit card (flat fee ~$2)
- Cash via VanillaDirect ($1.50 fee)
- Installment agreement with IRS: Interest and penalties apply but no processing fees
Can I pay state taxes with credit cards?
Potentially, yes. Most states allow it – make sure to check your Department of Revenue website.
- Most states allow credit card payments for income taxes via their Department of Revenue websites or through authorized payment processors.
- Fees vary by state and processor, often ranging from 1.5% to 3%.
- Some states use the same processors as the IRS (e.g., ACI Payments, Pay1040), while others have their own systems.
- You can typically pay estimated taxes, balances due, and extension payments by credit card.
Bottom Line
There’s no one-size-fits-all answer here. Whether paying taxes with a credit card works for you depends on your financial habits and goals. Use the table below to quickly evaluate if the strategy fits your situation. A bit of math—and discipline—can make all the difference.
If you are meeting a welcome bonus or using a high-reward card with a fee lower than 2%, you may come out ahead. Otherwise, consider lower-fee options or free IRS Direct Pay.