The IRS itself charges nothing—the credit card processor does
The Internal Revenue Service does not charge a fee for accepting your credit card payment. The fee comes from the payment processor—the third-party company that handles the transaction between your card and the IRS. That processor charges a percentage of your payment amount, typically between 1.87% and 2.35%, depending on which processor you use and whether you pay online or by phone.
This means a $5,000 tax payment could cost you $94 to $118 in processing fees alone. The IRS publishes a list of approved processors on its website, and each one sets its own fee rate within IRS guidelines. You choose which processor to use when you make your payment, so you can compare fees before you commit.
Key Takeaways
- The IRS charges no fee; the fee comes from the payment processor you select, and ranges from roughly 1.87% to 2.35% of your payment.
- You can see each processor's fee rate before you pay, so compare the dollar amount across processors for your specific payment size.
- The processor fee is separate from any interest or penalties the IRS may charge on unpaid taxes.
- Paying by ACH (bank transfer) through an approved processor costs less or nothing, so consider that route if you have time before the deadline.
- The fee you pay to the processor is not deductible as a tax expense on your federal return.
How the processor fee is calculated
The fee is a percentage of the total amount you pay, not a flat charge. If Processor A charges 2.00% and you pay $10,000, you owe $200 in fees. If Processor B charges 1.87%, the same payment costs $187. The difference compounds on larger payments: a $50,000 payment costs $935 at 1.87% but $1,175 at 2.35%.
The IRS approves multiple processors, and each publishes its rate on its own website before you enter your payment details. The approved processors change occasionally, so check the IRS payment processor page directly rather than relying on an older list. You can also call the processor by phone and ask the fee before you commit.
Credit card versus ACH (bank transfer) fees
Credit card payments always carry a processor fee. ACH payments—transfers directly from your bank account—often cost less or nothing. Some processors charge a small ACH fee (typically under $2.50 for individual taxpayers), while others waive it entirely. If you have time before the deadline and want to minimize fees, ACH is usually the cheaper route.
The tradeoff is speed. Credit card payments post to the IRS within one to two business days. ACH payments take three to five business days. If you are close to a deadline, the credit card fee may be worth the faster posting time. If you have weeks to spare, ACH saves money.
When the fee applies and when it does not
The processor fee applies whenever you pay the IRS by credit card, debit card, or digital wallet (Apple Pay, Google Pay) through an approved processor. It does not apply if you pay by check, money order, or electronic federal tax payment system (EFTPS), which is the IRS's own free payment platform for bank transfers.
The fee also does not apply if you pay through your tax software and that software routes your payment through EFTPS instead of a third-party processor. Some tax software offers this option at no charge. Check your software's payment screen to see which route it is using before you confirm.
Comparing processor fees before you pay
| What to compare | How to find it |
|---|---|
| Each processor's fee rate | Visit the IRS payment processor page or each processor's website directly. Rates are listed as a percentage. |
| The dollar amount you will pay in fees | Multiply your payment amount by the fee rate. Example: $5,000 × 0.0187 = $93.50. |
| Whether ACH is available and free | Ask the processor or check its website. Some charge a small ACH fee; others do not. |
| Payment posting time | Credit card: one to two business days. ACH: three to five business days. Ask the processor if you need confirmation. |
Because the fee is a percentage, larger payments make the fee difference more visible. On a $1,000 payment, the difference between 1.87% and 2.35% is only $4.80. On a $100,000 payment, it is $480. If you are paying a large amount, spending five minutes comparing processors can save you hundreds of dollars.
The fee is not deductible
The processor fee you pay to make a tax payment is not deductible on your federal income tax return. The IRS treats it as a personal expense, not a business or investment expense, even if you are self-employed or paying estimated taxes for a business. Some states allow a deduction for state tax payment fees, but federal rules do not.
This is one reason to factor the fee into your decision about whether to use a credit card at all. If you are paying $5,000 in taxes and the fee is $100, you are paying $5,100 total out of pocket, and the $100 portion provides no tax benefit.
What happens if you cannot pay the full amount
If you owe taxes but cannot pay in full, you can still use a credit card to pay part of the amount. You will owe the processor fee on whatever you pay by card. The remaining balance will accrue interest and penalties until you pay it, but those charges are separate from the processor fee.
If you are setting up a payment plan (installment agreement) with the IRS, you can make the initial payment by credit card and then pay the remaining installments by check, ACH, or payroll deduction. This lets you use a credit card strategically if you want to earn rewards on the initial payment, while avoiding fees on the rest.
Frequently Asked Questions
Can I use a credit card to pay the IRS without paying a fee?
No. Any credit card payment to the IRS goes through a third-party processor that charges a fee. You can avoid the fee by paying through EFTPS (the IRS's free bank transfer system), by check, or by money order. Some tax software routes payments through EFTPS at no charge; check before you confirm payment.
Does the processor fee change depending on the type of credit card I use?
No. The processor fee is the same regardless of whether you use a rewards card, a basic card, or a debit card. The processor charges a percentage of your payment amount, and that rate does not vary by card type. You earn any card rewards normally, but the processor fee stays the same.
What if the processor I choose goes out of business after I pay?
The IRS receives the payment directly from the processor, so your payment is safe even if the processor fails later. The IRS records the payment under your Social Security number or EIN as soon as the processor submits it. Keep your payment confirmation number for your records.
Can I pay estimated taxes by credit card with the same fee?
Yes. Estimated tax payments made through an approved processor carry the same percentage fee as regular tax payments. If you pay quarterly estimated taxes by credit card, you will owe the processor fee each time. ACH payments for estimated taxes often cost less or nothing.
Is the processor fee the same if I pay by phone instead of online?
The fee rate is set by the processor and does not change based on how you pay. However, some processors may charge a small additional fee for phone payments. Check with the processor before you call to confirm whether a phone payment carries any extra charge.