Pay federal taxes with cash at participating retail stores

Taxpayers who don’t have a bank account or prefer not to use electronic payment methods can pay federal taxes with cash at participating retail locations. The Internal Revenue Service (IRS) offers this option through approved payment processors in all 50 states and Puerto Rico.

The retail cash service can be useful for individuals, self-employed taxpayers and small-business owners who need to submit a federal tax payment. However, the process requires advance planning. Taxpayers must obtain a payment barcode before visiting a retailer, and each payment is limited to $500.

Who can use the retail cash option?

The service may be appropriate for taxpayers making payments toward an individual income tax liability, estimated taxes, or other eligible federal tax obligations. The taxpayer must provide accurate information, including the applicable tax form, tax year, and identifying details needed to apply the payment to the correct IRS account.

This option won’t work for taxpayers who need to make an immediate payment, cannot complete the IRS verification process or need to pay an amount exceeding the service’s limits. In those situations, another IRS-approved payment method, including electronic payment options, may be more appropriate.

Start with an approved payment processor

The process begins online through one of the IRS-approved payment processors, such as ACI Payments, Inc. or Pay1040.com. The taxpayer selects the applicable tax form and tax year, enters the requested information and chooses the option to pay with cash.

An email address is required. The processor sends an initial email confirming the submitted information. The IRS then verifies the payment request. Taxpayers should review every entry carefully because incorrect information could delay verification or cause the payment to be associated with the wrong tax period.

Each cash payment includes a service fee charged by the payment processor. Taxpayers should review the fee before completing the request.

Wait for the payment barcode

After the IRS verifies the information, the payment processor sends a second email with a payment barcode and instructions. Taxpayers shouldn’t visit a retailer until they receive this barcode.

Taxpayers should set up the payment at least seven days before the due date to avoid penalties and interest. The barcode may be printed or displayed on a smartphone; the code expires after 20 days, which means taxpayers must complete the retail transaction during the validity period.

Complete the payment at a participating retailer

Taxpayers should use the processor’s retailer locator to identify a participating location. Retail partners may include stores such as Dollar General, Family Dollar, CVS Pharmacy, Walgreens, Walmart, Kroger, 7-Eleven, and Circle K. Participation can vary by location, so taxpayers should confirm the store’s availability before traveling.

At the retailer, the cashier scans or enters the barcode and accepts the cash payment. The taxpayer should review the transaction and obtain a receipt. The receipt is important evidence that the payment was submitted and should be retained with tax records.

Understand the payment limits

The retail service permits payments of up to $500 per transaction. Additional limits vary by processor. Taxpayers should check the processor’s current rules before making multiple cash payments. Taxpayers shouldn’t assume they can divide a large liability into multiple retail transactions without first checking the processor’s rules.

A taxpayer who owes more than $500 should consider another cash payment option or a different IRS-approved payment method. Splitting a liability into multiple payments could create delays, additional fees, or processing complications.

When the retail method may not work

The service may not be suitable when the barcode hasn’t been issued, the barcode has expired, or the taxpayer’s information can’t be verified. It may also fail when the selected retailer no longer participates, the location cannot process the barcode, or the taxpayer waits too long to begin the process.

Taxpayers facing an imminent deadline should avoid relying on a retail payment that hasn’t been completed. The payment may require additional time to reach and post to the taxpayer’s IRS account.

Cash-payment recommendations for taxpayers and tax professionals

Taxpayers should start the process early, enter tax information carefully, confirm the retailer’s participation, and keep the processor’s emails and retail receipt. Tax professionals can help clients verify the tax period, payment type, and amount before the request is submitted.

A cash payment at a participating retailer can provide a practical alternative for taxpayers who don’t have a bank account or prefer to pay in cash. Its success depends on accurate information, advance planning, and compliance with the barcode, retailer, and payment limits.