Not if you can get 3% cashback on a transaction while paying a 2.5% fee.
The only way to salvage this as a positive is to pay it with a new credit card and reap a very large signing bonus
If you have regular rewards card, like 1%-1.5%, sure. But if you have 3% or 5% (I don't know of any card that does it on taxes specifically, but there might be ones where it fits some of the categories) or if you need to fulfill requirement like "spend $X000 in N months and get tons of points" then even with the transaction fee it might actually be a pretty good deal.
I’ve never seen a 5% rewards card for generic purchases. Does that exist?
Only for rotating spend categories. Sometimes you have to jump through hoops to activate those categories.
The BBVA NBA AMEX used to earn 5% cash back twice a year. I would pay six months worth of phone, internet, insurance, etc upfront during that time.
The 5% was eventually capped and the card no longer exists.
The Amazon Prime Visa gives 5% back on Amazon purchases.
Not 5% for everything, but "5% in our store" are common (Amazon, Best Buy, Lowes, etc.) and of course tons of cards do categories, so I can't exclude the case where however the service is classified (I have no idea... is there a category for government payments?) it fits one of the categories. In fact, some card might even run it as a promotion - with suitable limits, it's no more expensive than any other 5% deal...
What's the fee? Is it higher than the 2% cash back Citi gives you?
They're typically 2.5 - 3.5%.
You can pay your federal income taxes via credit card for 1.87%
Wait, seriously? I only ever saw a bank account option. I'd totally do this.
Oh wow, so I have to give them my name, address, phone, and SSN just to process a credit card payment? That's not worth it...
Your SSN is essentially your Tax ID number, so I'm not sure how else you would expect them to pay your taxes on your behalf.
Well I kind of hoped I could pay IRS directly rather than through a middleman, or get a clear, no-loophole guarantee of some sort that they would do nothing with my SSN other than transmit it to the IRS. (Or through TurboTax, which I've unfortunately already used anyway, meaning they already have my info.)
The IRS doesn't accept credit card payments. That's why it's farmed out to third-party companies like the one I linked to.
... How else would the IRS know how to credit your payment without that information?
The sibling comment asked the same question 2 hours ago. See my reply there.