$3.49 Debit Card Fee = LOTS of Delta Miles For Tax Payments!

 Disclaimer:  I am NOT a tax professional, so please consult YOUR tax professional before you make any tax-related decisions.

I wrote earlier about a debit card which offered a 30,000 Delta mile sign-on bonus.  Unfortunately, the sign-on bonus for that debit card is now only 5,000 Delta miles.

However, this debit card could be worth it for folks who make large tax payments and are searching for a way to get lots of miles or points for their tax payments.

PayUSATax lets you pay your taxes using a debit card for a flat fee of only $3.49.  This means that you could theoretically pay $100,000 in taxes and earn 100,000 miles or points for only $3.49 – a terrific deal!

Debit Card Miles 1

$3.49 Flat Fee for Using a Debit Card to Pay Taxes

But debit cards are not very profitable for banks, so most banks don’t let you earn miles or points for using a debit card and certainly not for tax payments.

For example, the terms and conditions of the Bank of America debit cards say:

“Mileage credit will not be awarded for federal, state or local tax payments, or similar payments to federal, state and local government agencies.”

I recently made two estimated tax payments of $10 before the June 15 deadline, as a test, with the Bank of America Alaska Airlines Visa debit card and the MasterCard debit card which earns Delta miles using PayUSATax.

PayUSATax charges a flat fee of $3.49 if you use a Visa or MasterCard debit card.

Debit Card Miles 2

100,000 Miles for only $3.49

I didn’t earn any Alaska airlines miles for using the Bank of America Alaska Airlines card, but I did earn miles using the Delta debit card!  I also earned miles for the $3.49 convenience fee.

As always, this was my personal experience, and your experience could be different!  View from the Wing points out that the bank which issues the Delta airlines debit card recently failed the Fed stress test and they may be issuing points earning debit cards as a way to attract deposits.

The terms of the Delta debit card do NOT (as of now) prevent you from earning miles for using the debit card for tax payments.

I don’t expect this to last very long, because I suspect giving away potentially hundreds of thousands of Delta miles for only a $3.49 fee isn’t commercially viable for some of the parties involved.

The Delta debit card has a personal and business version, but the personal version earns 1 mile per $1 spent, whereas the business version earns only 1 mile per $2 spent.

Note that there are limits on the number of payments you can make with PayUSATax, but you may be able to make more payments via telephone.  My Delta mile earning debit card had a limit of $35,000 per day, but won’t be testing if that is really enforced, because of the absence of $35,000 in my Suntrust account.

But is it worth it to earn Delta miles – even if they are close to free?   View from the Wing debated The Points Guy at Frequent Traveler University in April, so refer to this summary to see if earning Delta miles makes sense for you!

Bottom Line:  Paying only $3.49 for a lot of Delta miles when you pay your taxes could be a great deal for some folks!

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29 Responses to $3.49 Debit Card Fee = LOTS of Delta Miles For Tax Payments!

  1. do you have to be a resident of a certain state? does the card carry fees?

  2. darius, thanks for the tip, hopefully when our next est tax payments are due mid Sept, the deal will still be good.

  3. @emily – Per the terms, you have to be a resident of a certain state, but folks who don’t live in the covered states have been able to get the card via an online application or chat. The card has a $75 annual fee and a $12 monthly fee for balances less than $3,000. More details here.

    @Wes – Good luck and please let me know if it works when it comes time to make the next payments.

  4. THEsocalledfan

    I think it should be pointed out that we still don’t know what “abuse” of SunTrust will do. They very well could shut someone down who makes estimated payments for thousands and thousands just to get refunds.

  5. I made estimated payments of about $4000 with this card last week. (Yes, I’m aware I made the payments about a month late). I won’t see my points until early August, but my account is still in good standing with SunTrust.

    I don’t know if it matters, but I use the card for certain day to day items also.

    I’ll definitely take Delta miles over no miles :)

  6. I forgot to mention that the convenience fee for my state tax (KS) is over $10 so I did not use the card for that payment.

  7. But…isn’t there a fee from the PayUSAtax to use this service? So, you have to take that into account. At least that is how it is with a credit card. I used this last quarter and felt like I was still ahead but there was the Visa charge plus the PayUSAtax charge.

  8. It’s too bad this isn’t usable for paying property taxes! We have no income tax in Texas, but hefty taxes on real property.

  9. Another easy way to earn miles with this account (which I recently opened under this promotion) is to pay your recurrent monthly payments, such as mortgage, that cannot easily be made with credit cards. I was paying my mortgage through chargesmart but the fees were too high. I also switched my car loan (also being paid by chargesmart but with high fees) to Suntrust. In order to get the miles the payments have to be recurrent (set it up to pay monthly). $12 monthly for Suntrust sure beats the $50+ I was paying chargesmart..

  10. @THEsocalledfan – Good point! I’m not suggesting using this to overpay taxes and to then claim a refund. Not only do you have to make an interest free loan, but you run the risk of audits from the IRS and the bank.

    @Anita – Good reminder to mix in everyday spending when using the card.

    @Juli – The fee is a flat fee of only $3.49 when you use a debit car with PayUSATax.

    @Miles – You could use it for federal tax payments instead.

    @mariana – Thanks for sharing. I’ll try it out!

  11. you don’t get miles for ach transactions, only for debit card purchases. most car and house payments would be an ach transaction.

  12. Has anyone done this already and got their statements from the bank or irs yet?

    It would be interesting to know if the $3.49 is all the final costs are.

  13. Update – I paid my estimates with the Suntrust debit last week. I was surprised that the Delta miles posted yesterday. I received points for the amount of my taxes AND the $3.49 fee. The $3.49 fee (for federal) was the only cost.

    There will be no additional charges from the IRS.

  14. Anita

    thank you for the follow up. I am still dubious on the deal until statements come in.

    But that said, I hope its for real

  15. Hmm… risking the chance of audits by states for the purpose of earning a small amount of miles?

    I’ll pass.

  16. @John – I don’t understand why paying your taxes due would trigger an audit?

  17. Because you know there will be people that will intentionally overpay to get miles.

    Then, when they get an audit because of overpayment, they’ll whine.

    I don’t see anything wrong though with those that legitimately pay their taxes using your method, and don’t intentionally overpay. :)

  18. I overpay constantly especially in the beginning of the year so I don’t get nailed with some horrific penalty and interest charge. I adjust at the end of the year. The IRS will be more than happy to have your money longer. I have no clue where you are getting this overpayment triggering an audit when in fact everything I’ve read about it indicates just the opposite. Granted if you owe 10K and you overpay 100K you might raise some eyebrows if your income history cannot support paying that. Put it this way, if you owed 80K in taxes and overpaid 20-30K they aren’t going to blink.

  19. Pingback: Alaska Air Debit Card | Million Mile Secrets

  20. @mariana/darius, can you explain how to use Suntrust debit card to pay (car) loan by setting up recurrent payments? thanks.

  21. Pingback: Credit Card Taxes | Million Mile Secrets

  22. I know the boat has sailed on this topic, but I checked with Suntrust (I have an account though I’m in NY). They said there is a $3000 limit per 24 hours.

    Love the site!

  23. @Rudy – I haven’t tested the maximum purchase, but I was told the maximum daily limit was higher. Perhaps it varies by individual.

  24. Pingback: Why I Paid My Taxes With a Credit Card to Earn Points and Hotel Nights | The Points Guy

  25. Would the amex premier gold rewards count as debit or credit? since it’s a checking card

  26. @Tzukino - The AMEX Premier Rewards Gold card is a charge card and won’t qualify for the $3.49 reduced fee. But you can use it to pay taxes for a higher fee.

  27. Pingback: How to See if Your Credit, Debit, & Gift Card Tax Payments Are Received by the IRS | Million Mile Secrets

  28. Just curious, does the system just “know” that your card is a debit card? How do you know you won’t get charged the credit card rate?

  29. I’ve found that my account has a PIN limit of $2,500/day for Debit transactions. So you can run it through as a credit card, but then you’re talking about a percentage fee, not the flat low fee. In that case, you could use whatever point earning card you wanted.

    I imagine you could pay estimated taxes with several money orders and mail it in…

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