You might not like paying taxes, but when you pay taxes via credit card can be quite rewarding. The key is to earn credit card rewards that more than offset tax payment fees. For example, if you’ve signed up recently for a card that requires large spend to get a big welcome bonus, paying taxes via credit card can be the solution.
Here’s everything you need to know about paying taxes with credit cards…
Update 10/28/22 – Updated with warning against using PayPal as the payment method with ACI as the processor (in short, don’t). Added FAQ’s and PayPal 5x deal as well.
Table of Contents
Important due dates
2022 Tax Year Due Dates
April 18, 2022: 1st quarter 2022 estimated taxes due.
(Payable online from 03/01/22 – 05/15/22)June 15, 2022: 2nd quarter 2022 estimated taxes due.
(Payable online from 05/15/22 – 07/15/22)September 15, 2022: 3rd quarter 2022 estimated taxes due.
(Payable online from 07/15/22 – 10/15/22)- January 16, 2023: 4th quarter 2022 estimated taxes due.
(Payable online from 10/15/22 – ?) - April 17, 2023: End of year taxes due.
Deals
Current Deals
- Nearside Debit: 2.2% back on debit spend through 2023.
Note 6/9/22: Out of the 3 processors, only payUSAtax accepted my Nearside card as a debit card (the others tried to charge me credit card rates). Also note that Nearside seems to have a $10K transaction limit. - Chase Freedom and Freedom Flex: 5x on PayPal purchases up to $1500 from 10/1/22-12/31/22.
- Peruse best credit card welcome offers here.
- Simon Mall has been offering near-weekly discounts on fees for bulk orders of $1K gift cards. You can see the current (or most recent) deal here.
Future Deals
- TBD
5 reasons to pay federal taxes with a credit card or gift card
1. Profit w/ a 3% Cash Back card
A number of credit cards earn cash rewards greater than 2%. Some even earn 3% cash back:
- The new/updated Paypal Mastercard will earn 3% cash back on all PayPal purchases. Details here. This approach will work only with the services that allow payment through PayPal.
- The Paceline card earns 3% cash back for all spend on weeks in which you meet the app’s exercise goals.
- The Discover It Miles card earns 3% for the first year of card membership (you earn 1.5% and then at the end of the year all cash back earned is doubled).
Since you’ll earn 3% cash back on both the base tax payment and the processing fees with the above cards, your profit will be slightly more than 1% of your tax payment.
Example:
- $10,000 tax payment + 1.96% fee = $10,196
- Cash back earned at 3% = $305.88
- Profit = $305.88 – $196 = $109.88 (1.1% of $10K)
For more examples of cards that earn better than 2% rewards, see: Best Rewards for Everyday Spend.
2. Meet minimum spend requirements
If you recently signed up for new credit cards, chances are good that you have to spend thousands of dollars in order to earn the associated signup bonuses. Paying taxes is a cheap and easy way to accomplish that.
Below are some of the most valuable current welcome bonuses for consumer cards. If you’re interested in business cards, please click here to see the best business card offers.
Click on a card for details; Press “Next” to see more offers:
Card Offer
![](http://cdn.nextinsure.com/imaging/opt/73e79a4a-2cdd-4bf0-abd8-fd194139ebae.png?w=300" alt="Capital One Venture X Rewards Credit Card" />){kind=small}
![](http://cdn.nextinsure.com/imaging/opt/534df778-fadf-4350-9e01-291110eaf2a9.png?w=300" alt="Capital One SavorOne Cash Rewards Credit Card" />){kind=small}
3. Buy points cheaply
Several credit cards offer up to 1.5 transferable points or miles per dollar. In these cases, a 2% tax payment fee (rounding up a little) means that you can essentially buy miles for 1.3 cents each. Even better, some cards earn 2 transferable points per dollar for all qualifying purchases. With these 2X everywhere cards you can essentially buy points/miles for 1 cent each. Either way, if you plan to use your points toward high value awards, this is a cheap way to acquire those points.
2X Example:
- $10,000 tax payment + 2% fee = $10,200
- Miles earned at 2X = 20,400
- Cost per mile = $200 / 20,400 = 0.98 cents per mile (round up to 1 cent per mile)
1.5X Example:
- $10,000 tax payment + 2% fee = $10,200
- Miles earned at 1.5X = 15,300
- Cost per mile = $200 / 15,300 = 1.3 cents per mile
Cards that offer 2X transferable points per dollar:
Note that some cards offering 2x everywhere are not included below because their points are worth much less than airline miles. An example is that most Marriott cards offer 2x everywhere rewards.
- Citi Double Cash: Earns 2 cents per dollar, uncapped. Cash rewards can be converted to ThankYou points, and when paired with a Citi Premier or Prestige card, those points can be transferred to a selection of airline and hotel programs.
Card Offer and Details - Amex Blue Business Plus: Earns 2 Membership Rewards points per dollar on up to $50K spend per calendar year. Points can be transferred to a large selection of airline programs or to a few hotel programs.
Card Offer and Details - Capital One Venture, Venture X, or Spark Miles. Capital One offers three cards that earn 2X “Miles” per dollar on all qualifying spend. These “miles” can be transferred to airline miles & hotel points, usually at a 1 to 1 rate. This means that the following cards are capable of earning 2X miles everywhere:
Card Offer and Details
Cards that offer 1.5X points or airline miles per dollar:
- Chase Ultimate Rewards. Two no-fee cards in Chase’s lineup earn 1.5 Ultimate Rewards points per dollar for all spend. Pair either one with a premium card (e.g. Sapphire Reserve, Sapphire Preferred, Ink Business Preferred) to transfer points to several airline or hotel programs:
Card Offer and Details - Amex Membership Rewards. Amex offers two cards that are capable of earning up to 1.5X. In either case, points can be transferred to a large selection of airline programs or to a few hotel programs. Note that the Everyday Preferred card requires 30 charges per billing cycle to earn 1.5x, and the Business Platinum card requires purchases of $5K or more to earn 1.5x when paying taxes.
Card Offer and Details - Airline miles. A few airline branded cards offer 1.5 miles per dollar for all spend:
Card Offer and Details
4. Earn valuable big spend bonuses: elite status, free nights, companion pass, etc.
Many credit cards offer bonuses for meeting high spend thresholds. You can find a comprehensive list here: Best big spend bonuses. Here are a few examples:
- Amex Delta Reserve or Delta Reserve Business: Spend $30,000, get 15,000 Medallion Qualifying Miles (towards elite status). At $60,000, $90,000, and $120,000 you’ll get another 15,000 Medallion Qualifying Miles.
- Amex Delta Platinum or Delta Platinum Business: Spend $25,000, get 10,000 Medallion Qualifying Miles (towards elite status). At $50,000 spend, get another 10,000 Medallion Qualifying Miles.
- Southwest Plus, Southwest Premier, or Southwest Business: With Southwest, when you earn 125,000 points in a calendar year (including points earned from credit card spend) you get a companion pass good for an unlimited number of flights for the rest of that year and all of the next calendar year.
- Barclaycard JetBlue Plus, or JetBlue Business: Spend $50,000 and get Mosaic status which offers free changes and cancellations; free checked bags; expedited security; early boarding; free drinks; enhanced point earnings; and 15,000 bonus points upon qualifying.
5. Liquidate Visa/MasterCard gift cards cheaply
Visa and MasterCard gift cards are debit cards. As such, they qualify for low flat fees for debit tax payments: $2.20, $2.50, or $2.55 (depending upon the tax processor you use). In other words, your cost to liquidate $500 gift cards will be approximately half a percent. That’s pretty cheap.
If you use $500 Visa/MasterCard gift cards, then you can pay the following amounts:
- PayUSAtax.com ($2.55 fee): Make a $497.45 payment with a $500 gift card.
- What is known to work:
- What sometimes works:
- Vanilla brand Mastercard gift cards sometimes work with PayUSAtax and sometimes do not. The ability to pay with these Mastercard gift cards through PayUSAtax seems to come and go.
- What is known to not work:
- Vanilla brand Visa gift cards are not recognized as debit cards at PayUSAtax.com and so they will incur the higher credit card processing fee.
- Metabank issued Mastercard gift cards are reportedly not working at PayUSAtax (Reported again on 5/26/21 by Dokus).
- Pay1040.com ($2.50 fee): Make a $497.50 payment with a $500 gift card.
- What is known to work:
- Metabank issued Visa gift cards (including from Simon Mall) appear to be working again. Reported by Rosco in October 2021. But Vince reports otherwise in November 2021. YMMV.
- Metabank issued Mastercard gift cards are working as debit cards. Reported by StepheH. Reported again on 5/26/21 by Dokus.
- Sunrise Visa working as debit at Pay1040.
- Vanilla brand Mastercard gift cards work at Pay1040. Reported by Yue.
- What is known to work:
- ACI Payments (Previously named “Official Payments”) ($2.20 fee): Make a $497.80 payment with a $500 gift card.
- What is known to work:
- Metabank issued Visa gift cards (including from Simon Mall) appear to be working (note though that this seems to come and go over time). Vince reported problems with Simon gift cards in November 2021. YMMV.
- Vanilla brand Visa gift cards work at ACI
- What is known to work:
The biggest problem with this (besides the fact that what works and what doesn’t work keeps changing!) is the IRS imposed 2 payments per processor limit. This means that you can liquidate no more than 6 gift cards per type of tax payment. In the past, Official Payments allowed more.
See also: Best options for buying Visa and MasterCard gift cards.
How to pay taxes via credit card: Key Information
Here is key information you’ll need to know about paying taxes with credit or debit cards:
Credit card fee 1.87% to 1.98%
The IRS maintains a list of companies that accept credit and debit cards towards tax payments. You can find the current information by clicking here. Currently there are three separate payment processing companies on the list. At the time of this writing, debit card fees range from $2.20 to $2.55 per transaction and credit card fees range from 1.87% to 1.98%. Alternatively, you can pay taxes via the Plastiq Bill Pay service, but that will cost you more: 2.85%.
Additional Info Direct from the IRS
The IRS page that lists options for paying by credit or debit card also lists the following “Additional Information”:
- No part of the card service fee goes to IRS.
- You don’t need to send in a voucher if you pay by card.
- Card processing fees are tax deductible for business taxes.
- You must contact the card processor to cancel a card payment.
- IRS will refund any overpayment unless you owe a debt on your account.
[Editor’s caution: In recent years the IRS has been very slow to do so] - Your card statement will list your payment as “United States Treasury Tax Payment” and your fee as “Tax Payment Convenience Fee” or something similar.
- Federal tax lien releases can take up to 30 days after we receive full payment; liens may remain for other individuals who haven’t fully paid their portion.
- When you pay while filing your taxes through online software, different card fees apply.
Two payment limit per processor
The IRS maintains a table of frequency limits for paying taxes via credit or debit card (found here). In general, they say you can make up to two payments per tax period per type of tax payment. For example, you can make 2 payments every quarter to your quarterly estimated taxes, and you can make 2 payments every year to your annual taxes. Important: In my experience, these limits are enforced per payment processing company. That means that you can really make up to 6 payments per tax period per type of tax payment (or more if you make Plastiq bill payments as well). An IRS advisor I spoke with several years ago did not think that there would be any problem with making more than 2 payments by using different processors. Since then, I have made more than 2 payments per tax period many times and never had any issues. That is, of course, just my own personal experience. I can’t guarantee that your outcome would be the same.
Twice as many potential payments when filing jointly
If you file jointly with a partner, you can make payments in each person’s name, separately. These payments will still apply to the one overall tax return, but not always automatically. According to reader reports, in some cases the IRS matches these payments to the combined return automatically. In other cases, people have reported the need to call the IRS to ask them to combine the payments. I recommend calling shortly after filing your annual taxes to ensure that the IRS has correctly applied both sets of payments to the same return.
Obviously if you are filing separately, you can each make your own payments without any issues.
Unlimited payments via Plastiq
If you’re willing to incur higher fees, you can make an unlimited number of tax payments via the Plastiq bill pay service. Plastiq usually charges 2.85% to pay bills (including taxes) via credit card, but they occasionally offer lower fees via short term promotions. For details, please see: Plastiq Bill Payment Service.
To pay taxes via Plastiq, use Plastiq’s tax payment screen: plastiq.com/us-taxes.
Pay with Paypal
Update 10/28/22 – Doctor of Credit reports that using AIC to pay federal tax payments with Paypal as the payment method are triggering a cash advance fee. Oddly enough, although the tax payment itself is not be considered a cash advance, the fee charged by ACI is erroneously appearing as a cash advance, triggering a cash advance fee and interest immediately. This may be temporary, but in the meantime, best to steer clear of this method.
Both PayUSATax allow payments via PayPal. Sometimes cards like the Discover It, Discover It Student, and Chase Freedom offer 5% rewards for Paypal purchases (up to $1500 combined spend per quarter). Tax payments during these times should count!ACI Payments and
NOTE: There is a weird issue with selecting to pay with PayPal on the PayUSATax website. When clicking the PayPal button, a screen flashes up and disappears. Here is a work-around that has worked for some people, but not all: Put in valid credit card information first (for any credit card) and then press the PayPal button. When doing it this way, I got the PayPal screen to successfully load.
Pay with Samsung Pay & Google Pay
Some tax payment websites support mobile wallet payments such as Samsung Pay or Google Pay. The US Bank Altitude Reserve card earns 3X for mobile wallet payments, so it should be a great match. However, readers have reported that Samsung Pay and Google Pay are only supported through Visa Checkout and that this does not trigger the Altitude’s 3X rewards.
Frequently Asked Questions (FAQ)
Will I be charged a cash advance fee when paying taxes with a credit card?
I’m often asked whether credit card companies charge cash advance fees when paying taxes by credit card. The answer is no. All three official IRS payment processors agree (via their FAQ pages) that the payment is treated as a purchase not a cash advance. You can find FAQ info here, here, and here.
Are tax payment fees deductible?
Fees are no longer deductible for personal taxes: Tax preparation fees used to be deductible when itemizing deductions for personal tax returns, but that is no longer the case.
Card processing fees are tax deductible for business taxes: This can substantially reduce your net cost of using payment services.
How can I see my tax payment history online?
Once you’ve made payments through online processors, Plastiq, or other means, you may want to see proof that the IRS received the amount you sent. You can view past payments by signing up here: irs.gov/payments/view-your-tax-account.
When should I report estimated tax payments?
Estimated payments should be reported when filing your annual taxes. In my experience, if you make a mistake and forget to report some of these payments, the IRS will eventually catch the error and refund the difference.
How should I pay end of year taxes?
Tell your tax preparer or tax software that you’ll pay via check. Then, browse to the appropriate tax payment site (e.g. Pay1040.com, OfficialPayments.com, PayUSAtax.com, or Plastiq.com/us-taxes) to pay your taxes. There is no need to mail in the 1040V payment voucher.
What happens if I over-pay my taxes?
Overpayments will be refunded: The IRS will refund any overpayment unless you owe a debt on your account. Update/Caution: In recent years the IRS has been very slow to refund overpayments.
How do I request a refund if it doesn’t come automatically?
Schedule an appointment with the Taxpayer Assistance Center by calling 844-545-5640. When you finally speak to an agent, explain that you overpaid and would like a refund rather than applying the extra to next year’s taxes. Hat Tip: Rapid Travel Chai via personal communication.
Do I need to mail in payment vouchers?
No. No payment voucher is required. You don’t need to send in a voucher if you pay by card.
I was hit with the $10 Cash Advance fee for my September payment. I had never used ACI before but i decided to try it for the slightly lower fee. I saw the $10 extra charge when I got my statement and I was annoyed, but it was to small for me to worry about, I thought it was just their policy and I wouldn’t use them again.
Today I got an e-mail from Paypal apologizing for the erroneous charge (even though it wasn’t they who charged it). and they said they will credit the $10 back to my account.
Anyone tried to pay tax through Paypal on ACI or PayUSA in the last week or so? Did you get charged the cash advance fee? Thanks.
Anyone else not have their payment code 5x for Chase Freedom family but the separate fee did code with 5x?
BofA offering 2x extra points on Nov 5th this year. 3x Alaska miles is a good deal here.
I have property taxes coming up in a few days. If I were to put them on a credit card with welcome bonus (say chase ink cash or personal Amex platinum), will they count as part of the minimum spend? I saw some individuals discussing here that some did not have success with paying federal taxes, so curious what everyone’s experiences are with property taxes for those two cards?
Works Perfect for Me on Min spend or debit my checking so I Don’t have to Go ..Just got the WH discount @ 65 last year then 6% for this year..Debit is no fee CC I THINK 2%..
I would be 100% comfortable doing so. I think that some people have been caught in situations where for some reason the automated system didn’t award the welcome bonus and so agents were searching for a reason and erroneously explained it as being due to tax payments not counting. They absolutely should.
Perfect way to meet the Min spend on any new card. Prepay any bill then put every spend on the card. After 2.5 months pay some Taxes as Done u get the points $$$$.
A Zillion times as in Simple to do…
CHEERs
I filed late like a month ago and I got Fed in 3 weeks just like when I filed on time. No state refund yet but usually 4 weeks+..
CHEERs
Greg, I have tried, with no success, to ascertain why the two processors charge their credit-card rate on business debit cards (Nearside is a business debit card).
I would like to understand the argument of the two processors as to why they feel justified in doing this. Do merchants get charged a higher interchange fee for business debit cards versus consumer debit cards? If so that would be a somewhat acceptable answer.
In any case, these three processors struck a contractual deal with the IRS to collect and remit these payments. If that deal calls for the processors to accept all debit cards at their advertised rate they are in violation. Obviously none of us knows the terms of the deal, and good luck getting anyone at the IRS to explain or even appreciate this issue.
I’ve complained to the National Consumer Affairs Department and received no response
It is maybe more important than most people appreciate. For those who need to make large payments, each $20,000 payment results in >$400 savings when using a 2%+ card such as Nearside. Thats’s $3,200+ of potential cashback each quarter (8 payments for a married couple) that is not able to be utilized due to the restriction by the two processors.
Do you have any ideas as to who to contact? You have more of a voice than most of us. Please, lead the charge in finding out if the processors are justified in treating these debit cards differently. Many of us would be grateful.
Thank you
I don’t know the answers to your questions, but on the IRS site Pay1040 does explicitly state that the rates are only for consumer debit: “ *Example fee amounts in this column (“Debit Fee” for Pay1040) are for consumer or personal debit cards. For all other debit cards, see the amounts in the “Credit Fee” column under Pay1040.”
So I’m pretty sure that the only result we could get out of pushing this question is to get a similar disclaimer published for the other processors.
Two other ideas not mentioned by Greg that I haven’t tried yet so no idea if or how well they will work:
(1) If I pay up to $5000 of estimated taxes (including fees) on the first of each month (other than February) on Bilt, I will earn 2x Hyatt points (which beats 1x on the Hyatt card and 1.5x on Freedom Unlimited).
(2) I think the new AMEX debit card will earn 0.5 Membership Rewards points per dollar and the maximum transaction can be up to $5000. So, I would earn 2500 MR points at a cost of $2.20 per transaction, as opposed to 7500 Ultimate Rewards points (or 10,000 Cap One points or 10,000 Thank You points) at a cost of $93.50 per transaction. Depending on how you value points vs. cash or the different currencies, the debit card could come out ahead.
1. Right! Need to add this to the post. Thanks for the reminder.
2. I’m sure that the payment processors wouldn’t recognize the Amex card as a debit card so you would have to pay credit card rates. I’d love for someone to prove me wrong though.
Data point–used ACI with Paypal on my Freedom card on October 19. No cash advance fee–everything posted as normal. Read over DofC after I saw this post, and it sounds like it is kind of a mess out there as far as whether payments will be treated as a cash advance or not (some had the same experience as I did–others were coded as a cash advance). Also I did receive 5x points. However, now that I’ve done it once, having seen other people’s experiences, I’m not sure I’d do it again.
If you pay via Paypal on PayUSATax with the Paypal MC do you get 3% back?
Why would you expect to get 3%?
Strike that, meant to say 1%, and to see if it made sense to pay taxes with it. On a 10K tax payment the rewards are $100 less the flat debit card fee. Better than the $0 I get for eCheck payment. Or am I missing something.
Has anyone tried making two estimated tax payments for processor, total 6 payments, for Q4 2022? For some reason Pay1040 and ACI are telling me I have exceeded the number of payments allowed by IRS even though I haven’t done any Q4 payments yet.
I believe the ability to make Q4 payments begins October 15. So, it is probably telling you that you’ve already reached the max for Q3.
That would explain it. Although I do not see this information posted anywhere official. Thank you
See above – in the article under “Important Due Dates”.
I see it. Do you know what is the source of that information? Why isn’t this mentioned on the IRS website or the processors websites?
https://www.pay1040.com/TaxPayerTools/FrequentlyAskedQuestions
Under FAQ # 2
What federal tax payments can be paid through Pay1040 and when?Pay1040 accepts the following federal tax payments:
Personal:
Regarding using PayPal with PayUSATax and getting the disappearing PayPal wintdow:
I tried the “first enter a valid credit card” method mentioned in the post above with both Chromium and Firefox. Didn’t work.
I tried the “future scheduled payment” method in the comments below. Didn’t work. (I also tried creating a new account – didn’t help.)
I tried a combination of the two methods and was finally able to get the PayPal window to appear. “Great!”, I thought. And I was able to schedule a payment. HOWEVER, I then reviewed my scheduled payments, and it showed that the credit card I had entered to trigged the PayPal window was the payment method that was going to be charged.
I finally got it to work by doing something like the following (you may have to play around, like I did):
Strangely, this brought me to a confirmation screen which had PayPal selected as the payment type, and the correct amount, for an IMMEDIATE payment (I guess the future selected date got tossed out). I submitted and it actually charged my Discover card via PayPal, so ultimately it was a success.
Good luck.
how do you “create future scheduled payment?”
NM. I figured it out. You have to create an account first. Then I went to create a future payment, but didn’t actually click “add”. Then I just clicking back and forth between “credit card”, and entering CC info, and changing back to PayPal multiple times like you suggested, and it worked. Thanks
Adding a DP: I’ve purchased over $70K of Simon Mall Visa GC over the past 15 months, all the “Black Sparkle” type, and I’ve used them exclusively for paying taxes. I’ve never had a problem at Pay1040, ACL Payments, or PayUSATax. (Regarding PayUSATax, I did have problems with the mis-matching zip code error until I used either “future payments” or preferably used the pre-registration step described in my post a few days ago).
I can make 36 payments of up to $997 each ($1,000 less debit card fee) for one person using the Simon Mall gift cards per tax year. That includes six per quarter for 1040-ES; six for Form 4868 extension requests early in the year; and six for regular 1040 tax payments (not 1040-ES) for a given tax year. Each group of six payments consists of two via each of the three payment processors. Regarding 4868, you can request an extension and make those six extra payments regardless of whether or not you truly file late.
I also make payments for a married couple in my family, a total of 72 per year (36 per person) for the couple, by treating them like individuals when making a payment. I do NOT submit joint payments, and the payments appear on their individual/separate IRS accounts. They file jointly and it seems to work fine.
The various types of payments can only be made at certain times of the year (not 100% certain of these dates, and I’m quoting someone else who posted some of these): Q1 3/1-5/15; Q2 5/15-7/15; Q3: 7/15-10/15; Q4: 10/15-?; 4868/1040: as far as I know, the first several months of the calendar year that follows the tax year in question.
If you make the 6 regular payments to the IRS in February and March and then when you file your taxes in April you don’t end up owing any money to the IRS, where do you file for the reimbursement for the overpayment? On line 26 you list overpayments for estimated taxes and the amount applied form the year before, but where would you list overpayments for the current tax year to get reimbursed?
You just list all of your payments on your 1040. If the total of your payments exceeds the amount of tax you owe for the year, the IRS generates a refund. It’s no different than if you had paid too much via payroll withholding or any other manner.
Example: If your total tax due for 2022 is $10,000, and you paid $11,000 via payroll deduction, plus you made 6 payments of $1000 each via Simon debit card for that tax year, you would have overpaid by $7,000. You simply file your 1040 showing everything and you will get a refund of $7,000.
So just to clarify, if you make an overpayment on your 2021 taxes, you list that on your 2022 taxes and will get that back as a refund when you file your 2022 taxes?
No, you’re making this way too complicated! It doesn’t span across two different tax years.
You are going to do exactly what you always do on your tax return:
So, if you make a credit/debit card payment toward your taxes in 2022, you’ll include that payment on your 1040 for 2022.
I’m also unsure of where to include the six regular 1040 payments on my tax form. Let’s say I make 6 x $997 payments in January 2023, where do I include this $5,982? I’m using freetaxUSA and there is a place to enter my 2022 estimated tax payments, but I don’t see anywhere to enter the regular 1040 payments made in January 2023.
This assumes I do not owe any taxes for 2022 when I file in April 2023. If I do owe taxes, then these payments would be applied to that balance.
Attempt to use Simon $1k VGC as debit on PayUSAtax failed.
Error message says that the payment was declined by the card issuer because the billing zip code does not match what I entered in the payment form. However, the VGC has been registered using a matching zip code, so this should not be the actual problem.
If anyone has a workaround for this or has otherwise been successful using Simon VGC as debit on PayUSAtax, I would appreciate any helpful feedback. Thanks.
Hmmm. I just did this yesterday, as I noted below.
What will work instead is to make a future payment, dated for tomorrow. For some reason that doesn’t check zip code.
DONT DO TWO FUTURE PAYMENTS AT THE SAME TIME. Do one, wait for it to process, then do the next one a couple of days later.
Addendum: if you do two future payments at the same time, or for the same date, one will be ignored.
Also, you have to create an account to do a future payment. It’s a little hard to find, but click around until you find the option. Can’t remember which page it’s on. But it will be clearly marked once you find it.
Frank, you’re a legend. Thanks so much. I registered the card using the link you provided, tried again on PayUSAtax, and it worked perfectly. Success!
And I apologize for missing your comment from last night. For some reason, it didn’t come up when I reloaded the page this morning. My browser must have pulled up a cached version of the page I had up yesterday rather than reloading.
Glad it helped! My first message was actually moderated, so it shows as posting last night but it didn’t actually appear until this morning. So, it wasn’t there when you first looked.
For those who are having their Simon gift cards rejected by PayUSATax for the wrong zip code, you need to REGISTER the card in addition to activation. Here’s the link (if you don’t have the link handy, just Google “Simon gift card registration”):
https://www.simon.com/giftcard/account_register.aspx
As part of the registration process, you do have to login, but your regular login (the one you use at simon.com/volume) won’t work – you have to create a separate account. (I confirmed with Simon customer service that this is what you need to do).
Once you register the card, it is usable at PayUSATax (and you don’t have to set it up as a “future payment”; you can pay immediately). Registration doesn’t appear to be necessary for Pay1040 or ACI Payments.
Successfully used Simon $1k VGCs as debit on Pay1040 and ACI Payments for 3Q2022 estimated tax payments.
Thanks, FM, for maintaining this helpful resource!
Citi just charged me a $10 cash advance fee on the service fee portion of my 1040-ES payment via ACI Payments. How can it be? Their FAQ specifically says it will be treated as purchase and I never before was charged any cash advance fees.
Just paid 497.45 at PayUSAtax.com ($2.55 fee), Vanilla MasterCard GiftCard from CVS. Previously Vanilla Vis did not work
The estimated tax payment period overlaps. If I pay on 7/15/2022, how does the system know which quarter it is for?
Use caution with Amex. Starting to see this spending excluded from meeting sign-up bonus requirement.
Where have you seen that?
https://www.reddit.com/r/churning/comments/vte48s/comment/if85vqn/?utm_source=share&utm_medium=web2x&context=3
It looks like there are more counter datapoints than supporting ones.
Greg, confirming it happened to me today too
It is a good idea to save 1% on tax payment, but I would like to inform that payusatax, Aci payments that they claim they will send the payment to IRS in 5-7 business days. Its been two months and they have collected my money over $6000. I have called their customer service multiple times and emails but no response. On the phone for hours to talk to some one but no luck. Their customer service is poor. I do not think to earn a 1% cash back with all those headache. I am not sure how is everyone’s experience here but mine was completely bad. I used 1% cash back debit card and save $50 but its too risky with the method, I would not recommend anyone to use above method to save 1%. My money is lost and there is no way I can communicate with vendor. When I called the IRS they said they have not received the money and I should contact the vendor. But there is no way to get in touch with vendor. I am not sure why IRS still doing business with PAYUSATAX and ACI PAYMENT INC.
BE CAREFUL GUYS. If anyone is having a bad experience please share how to retrieve my money. Thank you
[…] Today is the last day to pay your Q2 2022 estimated taxes. This can be a decent method for cashing out gift cards, or for sign-up bonus spend at a relatively low rate (between 1.85% and 1.97% for credit cards, less for debits). The Frequent Miler has a complete guide. […]
Looking to meet SUB for Amex Plat Business. I’ve done the overpayment method for the April yearly tax filing before and received a refund without any problems. Is this the same case if I do the same with quarterly tax payments? I don’t owe any taxes, but if I made a 15k before June 15, can I request a refund say, in July? Not too sure how quarterly taxes work. Thank you.
No, you will not receive your overpayments quarterly. You’ll have to wait after you file taxes next year.
I’m using the Ink Unlimited this time with the offer of 5,000 for every 5,000, so 2.5%
I am going to owe a big {for me} tax bill next year. I have never had to make quarterly payments or estimated tax payments in my life. I received the offers for the AmEx Biz Platinum and the Biz Gold cards. I can easily meet the MSR for both these cards with taxes I will owe next year. If I mix in a lot of organic spend, is it okay to get these cards and use my tax payments to meet the MSR? Is there a limit on how much taxes you can prepay?
?=12/31/22
I am a first-timer paying for taxes like this, but I think I did it correctly. I used the $250 virtual Visa cards from giftcards.com, 2 of each at each of the 3 processors. All six transactions said they were successfully processed as Debit with the associated fees, including at PayUSAtax.com.
Greg, can you please investigate why the Nearside 2.2% Debit Card will not work with either ACIPayments or PAY1040. I have tried but the customer service for both is abysmal and I have not been able to get a straight answer from either entity. It seems that each of these processors would had to have negotiated a contract with the IRS. If that contract called for acceptance of debit cards then neither entity is fulfilling its obligations under the contract. Thank you
I need to make quarterly payments of about $3k for fed taxes. If I pay $6k one quarter, is it fine to skip the payment the next quarter? Or am I still on the hook for the $3k payment the next quarter, and I wouldn’t get the extra $3k back until my final tax filing is settled? Thanks
Yes it’s fine to then skip the next one
Put it all on the first one then forget about it for year.
Hey Greg – any recent DPs of tax payments not qualifying for Amex MSR? Was just told by a rep I had only met 50% of spend on a (now expired) MSR period for Biz Plat in which half of the MSR was done via paying taxes according to this guide. I’m worried I’m SOL on 150k MRs.
I received partial welcome bonus on Marriott Bonvoy Brilliant card (50K points instead of 150k points, I did receive the free night cert) and Amex rep opened a case. The back office response was that spend threshold has not been met due to tax payment transaction not eligible.
I argued that the T&C only states that the purchase of cash equivalents is not eligible. Tax payments are neither a purchase of cash equivalents nor listed in the prohibited list. The 2nd rep noted this down as a dispute to the back office response to the case. It took 5 calls over 2 months before I did receive the balance 100k points.
In my case I also questioned the case response as dubious because if requirements are not met then why was partial welcome bonus awarded. I have same problem unresolved with the Marriott business card (partial points and only 1 of 2 FNC), and have not been able to call repeatedly to pursue it since each call takes an hour or so.
No other datapoints that I’ve heard.
I was just told by Amex that tax payments do not count toward points/bonus spend
Thanks Tim. I’m pretty confident that reps who say that are misinformed. I haven’t paid taxes recently with Amex so I can’t prove it myself, but I bet many others have. Can anyone here chime in with a recent datapoint showing that Amex cards earn points & welcome bonuses when paying taxes?
Worked as of January 2022 for me
Amex Business Platinum bonus awarded with $5k of $15k spend in March this year
I accidentally overpaid my taxes via CC, but didn’t get a confirmation number or email. Did my payment get through? How long does it take to post to CC? It’s been 2 days and no confirmation email or pending transaction on my CC.
It sounds like the payment didn’t go through. You should at least have a pending charge right away.
DP: Paid estimated taxes with Nearside debit card using PayUSATax. Was charged flat $2.55 debit fee. Received 2.2% cashback from Nearside on both the tax payment and the debit fee.
Good to hear!
Can also confirm receiving 2.2% back on PayUSAtax with Nearside.
I searched, but didn’t see anything here about the Amex Rewards Debit Card. Unfortunately, my Datapoint is that it seems like ACI would accept it, but as a credit card with the 1.98% fees, and PAYUSA tax thinks it is an invalid card number. I already used my two payments on pay1040 with a credit card, so I didn’t try there. Disappointing, because that would be a great use of the Amex Rewards Debit.
Thanks for that info. Disappointing but not unexpected
When filing a joint return and making 3+ payments, do you need to switch the Primary tax payer to get more than 2 payments or does it not matter?
You can do more with a single tax ID by switching payment processors.
Hi, Greg. I just used a Vanilla brand debit Visa to pay estimated taxes at PayUSAtax.com. So it’s accepting that brand again, at least for the moment.
Glad to hear it!
So let me get this straight…I can connect my Citi Premier MC to my Paypal account, pay my taxes with Paypal and get 3% back, and then apply the dollars toward my minimum spend on the Citi card when I pay off the Paypal stmt?
Am I missing something here?
Not exactly. 3 percent back is by paying with the new PayPal MasterCard through PayPal
You need to stop advertising Nearside as “unlimited 2.2%” cash-back. They are not.
Learned hard way they are offering “2.2% cash back at participating merchants”
Don’t even dream on cash back on tax payment or regular online payments with the card. But you could have 2.2% at PANDA EXPRESS
DP above disagrees with you.
Maybe he need to try it before “disagreeing”
I actually made a payment and iT WASNT counted toward cash back. I called CS and got and explanation about “selected merchants”. Telling you, near side is a dud.
Hey Arch, you made a similar comment on another thread and I never head back from you regarding DP.
I think what Rob was trying to point out is that a commenter above paid taxes with Nearside and got cash back on the entire amount.
Which merchants did you not receive cash back on? I haven’t yet run across that with any of my purchases (including utilities) and haven’t heard any reports of cash back being denied, so would love to get more specific DP’s from you.
Hi Tim,
My bank is accepting debit card as method of payment. I tried Nearside and they did not count this as transaction eligible for cash back. I called CS and got the story about “participating merchants listed on web site”. Btw here is disclaimer from Nearside website:
Thank you,
A
Would paying $500 via Custom Cash followed by paying the remainder via Citi Double Cash be the best option? Would it code as 5% for Custom Cash?
No, 5% only applies to covered categories. Plus you’d pay 1.87%.
The smart move is to buy a $500 prepaid Visa/MC gift card at a pharmacy, which will get you 5% back, then pay with the prepaid card which will qualify as a debit card when paying taxes.
Key question about paying Federal taxes with Plastiq: How long does it take for the payment to go through?
This should probably be addressed above and on the dedicated Plastiq page, which, at present, only says (generally) that “payments by check usually take about a week, but two weeks is not unusual.” I don’t know if that applies to Fed. tax payments, but if it does that obviously won’t work when close to the due date.
@Kent, set up your login with IRS.gov through ID.me and you can see the details for your account, including date posted.
If I use Pay1040 to pay my jointly filed annual federal taxes, can I split the payment across 2 different credit cards, to meet two points promos I am chasing? Is it okay to make both payments in my name, since I am the primary tax filer?
Yes that’s fine. Just make two separate payments of however much you want to charge to each card
If I generally get a refund, can I still pay estimated quarterly taxes and just get refunded the difference. Need to meet minimum spend on my new Platinum Card
Yes
Do I have to pay in all four quarters?
No
@David, that’s very creative. High-five.
Should I be worried that no estimated payments made a year ago for tax year 2021 are showing on the IRS website? Payments are showing for every year before tax year 2021. This is for the primary SSN.
Surprisingly, P2 sees their estimated payments on their logon (but not any of the payments made by P1; those aren’t showing anywhere).
Yes (unfortunately). Assuming those payments went through on credit card, you may need to start investigating what IRS account they got credited to. But presumably you have already filed your 2021 taxes and received a refund? If so, sit tight and see if the IRS comes after you. If they do, maybe that’s when you pull out your receipts from the credit card transactions and start to work with the IRS to find where the payments went. Also possible that during the wait for this shoe to drop, the credited payments will show up retroactively — the IRS is seriously understaffed and behind on things.
(FWIW, I went through something a year ago for 2019 [!] taxes in which IRS had not credited me for something [check, not credit card]. It is a bit harrowing, plus you learn a lot about how long a human can stay on hold, but they do have a system for investigating these issues.)
What happens when paying an amount that contains pennies, e.g. $500.12?
I thought the IRS only deals in whole dollars. Or do they add all estimated payments and round, i.e. 499.50 would turn into $500?
I don’t think there’s a problem unless you use TurboTax due to a known rounding problem. Outside of Turbotax, I believe that the IRS allows you to round to the nearest dollar but you don’t have to do so. Below is what I posted previously on here about what happened to me last year using TurboTax:
“Some of you may benefit from knowing how I got into this mess: TurboTax rounded my payments to the nearest dollar, which meant that it under-reported my payments by $1. (I made numerous payments via credit card). They sent me a letter to which I responded, but they still held my $8,000+ refund for 8 months. Ridiculous. So, if you use TurboTax (which I certainly don’t recommend), I suggest either ensuring your payments are in whole dollars and/or carefully checking to be sure that TurboTax doesn’t do any rounding.”
Pay1040 is good and is the cheapest, but the problem is they do not have all of the possible forms and there is no way that you can fill in the information that is not listed. When I called them about a form that was not listed they suggested I use one of the other providers but those are more expensive so my return was less. Not good.
When I filed my tax I chose credit card for payment (which h&r block direct me to pay1040 with higher rate), I then opened another tab and proceed the payment. And I just noticed this site suggested to select pay by check instead.
Should be be worry about what I did?
According to the IRS, the tax due date is 18 April 2022, not 15 April (likely due to the Good Friday on the 15th).
Thanks! Fixed.
Any thoughts on NYS taxes, which charges 2.25%?
What kind of thoughts are you looking for?