IRS Card Payment Final Rule T.D. 10060 (Effective October 19, 2026): Credit and Debit Card Tax Payment Fees and What Individuals and Small Businesses Should Know Before Year-End

Bottom line in one breath

Treasury and the IRS published final regulations T.D. 10060 in the Federal Register on October 19, 2026 (91 FR 65980), effective the same day and applicable to tax payments made on or after October 19, 2026. The rule implements section 2303 of the 2019 Taxpayer First Act: the IRS may now accept credit and debit card payments directly (for example, over the phone) and charge card payers a "reimbursement fee," instead of sending taxpayers to third-party processors. For most individuals and small businesses, nothing changes today — as of October 20, 2026, IRS.gov still lists two third-party processors, Pay1040 and ACI Payments. But before the January 15, 2027 fourth-quarter estimated tax deadline and the 2027 filing season, it is worth re-comparing the cost of card, bank and payment-plan options.

News background

IRC §6311 lets the IRS accept tax payments by "commercially acceptable means." The 2001 regulation, §301.6311-2 (T.D. 8969), allowed card payments with two limits: the IRS could not pay any fee under card-processing contracts, and the IRS could not charge any fee to people paying tax by card. That is why taxpayers have used third-party processors that charge their own "convenience fee," none of which goes to the IRS.

Section 2303 of the Taxpayer First Act, signed July 1, 2019, amended §6311(d)(2): the IRS may pay a fee under a card contract as long as it fully recoups the fee from the people paying by card. The IRS proposed regulations on July 2, 2024 (REG-120137-19), received eight comments and cancelled the public hearing because no one asked to speak. The final rule adopts the proposed text without change. It was signed by IRS Chief Executive Officer Frank J. Bisignano and approved on September 10, 2026 by Kevin M. Salinger, Acting Assistant Secretary of the Treasury (Tax Policy).

The final rule does not itself launch any payment program or contract — it gives the IRS the authority. Whether and when the IRS offers direct card payments, and at what fee, depends on later IRS announcements. Sources: Federal Register 2026-21267 (T.D. 10060); IRS "Pay taxes by card or digital wallet" page (updated October 20, 2026).

Old rules vs. new rules

Who accepts the card: Old — only third-party processors (currently Pay1040 and ACI Payments). New — the IRS may accept cards directly or keep the third-party model.

Can the IRS pay processing fees: Old — prohibited. New — allowed, but the IRS must fully recoup them from card payers and "seek to minimize" the fees; contracts must be cost beneficial to the government.

Can card payers be charged by the IRS: Old — no fee or charge allowed (former §301.6311-2(e), now removed). New — a reimbursement fee, limited to what the IRS pays under the contract, paid at the time of and in addition to the tax.

Nature of the reimbursement fee: It is not a tax and is not refundable or creditable under §6402 — even if you overpay and the IRS refunds the tax, the fee is not refunded.

Error resolution: Card-account errors (such as a duplicate charge) and reimbursement-fee errors fall under section 161 of the Truth in Lending Act, section 908 of the Electronic Fund Transfer Act or similar laws; disputes over the underlying tax do not.

What did not change: Third-party processors may still charge convenience fees, and the IRS gets no share. Employers' federal tax deposits (such as Form 941 withholding and FUTA) cannot be paid by card and still go through EFTPS or other electronic transfers. IRS Direct Pay and EFTPS bank payments remain free.

Are you affected? Self-check list

If you pay estimated tax or a balance due by credit card (for example, for rewards): Pay1040 charges 1.75% for credit cards and ACI charges 1.85% (each with a $2.50 minimum). Check whether the fee exceeds your card's rewards.

If you are an S Corp owner or employer: payroll withholding, employer Social Security and Medicare, and FUTA deposits cannot be paid by card — confirm your EFTPS enrollment. Your personal Form 1040 estimated tax can be paid by card, but keep the two separate.

If you pay by card inside tax software when you e-file: different fees apply — integrated e-file processors charge about 2.49%–2.95%, usually more than paying directly through Pay1040 or ACI.

If you live in China or abroad without a U.S. bank account: Pay1040 accepts China UnionPay and other card networks, which can be one way to pay; still choose the correct tax type and tax year.

If you cannot pay in full: borrowing on a credit card adds card interest. Compare the fees, penalties and interest of an IRS payment plan first.

Simplified example

Simplified illustration only. Fees are from the IRS page updated October 20, 2026; use the processor's fee in effect when you pay.

A self-employed taxpayer owes a $10,000 2026 fourth-quarter estimated payment by January 15, 2027:

IRS Direct Pay (bank account): $0 fee.

Personal debit card: Pay1040 $2.15; ACI $2.10.

Credit card: Pay1040 1.75% = $175; ACI 1.85% = $185. With a 1.5% rewards card ($150 back), the net cost through Pay1040 is about $25; with 1% rewards ($100), about $75.

Compared with paying late: the failure-to-pay penalty is generally 0.5% per month (up to 25%), about $50 a month on $10,000, plus interest; underpaid estimates can also trigger the §6654 penalty.

If the IRS later offers direct card payments: compare the IRS reimbursement fee with third-party convenience fees — and remember the reimbursement fee is not refundable.

Action plan and timeline

Now (October 2026): Review how you paid tax last year. Employers should confirm their EFTPS account and PIN work; do not try to pay Form 941 deposits by card.

November–December 2026: Run a year-end projection and decide whether the fourth-quarter payment goes by Direct Pay, EFTPS or card; calculate the net cost first. The IRS limits how often you can pay by card.

January 15, 2027: 2026 fourth-quarter individual estimated tax is due. A card payment is dated when the charge is authorized; keep the processor's confirmation number. Your statement shows "United States Treasury Tax Payment" and a separate convenience fee.

2027 filing season: Watch for any IRS announcement of a direct card program and its fee. The balance-due deadline is generally April 15, 2027; paying part or all of the tax electronically and marking it as an extension payment can take the place of filing Form 4868.

Businesses: The IRS says card processing fees are deductible for business taxes. Record the fee separately from the tax, and do not book fees on personal tax payments to the company.

How YCL can help

Payment-method planning: a cost comparison of the payment channels available for each tax you owe (Form 1040 estimates, balances due, 1120-S/1065-related payments, employment taxes).

EFTPS and payroll compliance: enroll or check EFTPS for small businesses and S Corps and set a Form 941 deposit calendar to avoid deposit penalties.

Year-end estimated tax: calculate your fourth-quarter amount before January 15, 2027 to reduce §6654 penalty risk.

If you cannot pay in full: compare the total cost of an IRS payment plan, a short-term extension and a card, and apply for a payment plan for you.

Cross-border taxpayers: help clients in China or abroad pay under the correct tax year and tax type and keep proof of payment.

YCL is a multistate CPA firm serving clients nationwide, in English and Chinese.

FAQ

Q: Will paying taxes by card be cheaper after T.D. 10060?

A: Not necessarily. The rule lets the IRS accept cards directly and charge a reimbursement fee, and tells it to minimize fees, but sets no fee and launches no program. As of October 20, 2026, IRS.gov still lists Pay1040 (1.75% for credit cards) and ACI Payments (1.85%).

Q: Is a card payment fee refundable?

A: Third-party convenience fees do not go to the IRS; contact the processor. If the IRS later charges a reimbursement fee directly, the rule says it is not a tax and is not refundable or creditable under §6402, even if the tax itself is refunded.

Q: Can my company pay payroll taxes by credit card?

A: No. The IRS says federal tax deposits, such as Form 941 withholding, cannot be paid by card; use EFTPS or another electronic transfer. Individual Form 1040 estimated tax and balances due can be paid by card.

Q: Are card processing fees deductible?

A: The IRS says card processing fees are deductible for business taxes. Fees for paying personal income tax are generally personal expenses; ask a tax professional about your situation.

Book a consult

Book online: https://yclcpa.com/en/book

YCL Accounting & Consulting (YCL Tax, Accounting & Advisory)

Multistate CPA firm serving clients nationwide

Web: yclcpa.com ｜ Email: info@yclcpa.com

Phone: 919-802-8376 / 980-202-0666 ｜ WeChat: YCLUSA

Cary office: 1140 Kildaire Farm Rd. STE 208, Cary, NC 27511

Shanghai office: 2-516, Zhongye Xiangteng Plaza, Lane 31, Jiatong Road, Shanghai

Book a Free Consultation with co-founder Gloria (Chenchen) Liu, CPA.

Disclaimer

This article is general tax information only and is not tax, legal or investment advice for any person. It does not promise any tax result. It is based on T.D. 10060 (Federal Register 2026-21267, published and effective October 19, 2026), IRC §6311 and §301.6311-2, and the IRS "Pay taxes by card or digital wallet" and "Pay by debit or credit card when you e-file" pages. Processor fees can change and IRS guidance may be updated. Consult a licensed tax professional about your situation.