What Electronic Funds Payment Is and When You Use It

Electronic Funds Payment (EFP) is a system that lets you send money directly from your bank account to the IRS. The IRS pulls the payment on a date you choose, and the money reaches them within one business day. You do not write a check, mail anything, or use a third-party payment processor — the IRS connects directly to your bank.

You use EFP when you owe taxes and want to pay by the filing important date, an extension important date, or a payment plan important date. It works for income tax, self-employment tax, estimated tax, or any other tax the IRS collects. The payment is free if you set it up through the IRS website or phone line.

EFP is different from a wire transfer because the IRS initiates the pull from your account on a specific date you provide. With a wire transfer, you push the money to the IRS's bank account yourself through your own bank. Both reach the IRS quickly, but EFP is simpler if you have a checking or savings account and want the IRS to handle the timing.

Key Takeaways

  • Electronic Funds Payment lets the IRS withdraw money directly from your bank account on a date you choose, and the payment reaches them within one business day.
  • You can set up EFP through IRS.gov, by phone at 1-800-829-1040, or through tax software that offers the service at no cost.
  • The IRS needs your routing number and account number, which you can find on a blank check or by calling your bank.
  • If you miss the payment date or need to change it, you can cancel and reschedule through the same method you used to set it up.
  • EFP works for any type of tax debt and is the fastest free payment method available to individual taxpayers.

How to Set Up Electronic Funds Payment Through IRS.gov

Go to IRS.gov/payments and select "Pay Now." You will see several payment options; choose "Electronic Funds Payment" or "Direct Debit." The IRS uses both terms for the same service.

You will need your Social Security number or Individual Taxpayer Identification Number, your tax year, and the amount you want to pay. Have a blank check or your bank's routing and account numbers ready. The routing number is the nine-digit code at the bottom left of a check; the account number is the longer code in the middle. If you do not have a check, call your bank and ask for both numbers.

Select the date you want the IRS to pull the money. This date must be on or before your payment important date — if you are filing by April 15, you cannot schedule a payment for April 20. The IRS will confirm the setup when ready and send you a confirmation number. Write this number down or take a screenshot.

Setting Up EFP by Phone or Through Tax Software

If you prefer to set up the payment by phone, call the IRS at 1-800-829-1040. A representative will walk you through the same information: your tax year, the amount, your bank details, and your preferred payment date. You will receive a confirmation number at the end of the call.

Many tax preparation software programs — including TurboTax, H&R Block, and TaxAct — offer Electronic Funds Payment as a built-in option when you file your return. If you use this route, the software collects your bank information and sends it to the IRS on your behalf. You still choose the payment date, and you still get a confirmation number. There is no fee for this service through the IRS or through most tax software.

Some tax software charges a separate fee for expedited payment processing, but that is optional. The standard EFP option through tax software is always free.

What Information the IRS Needs From You

The IRS requires five pieces of information to set up an Electronic Funds Payment. First, your Social Security number or ITIN — this identifies your tax account. Second, your tax year — the year for which you owe the tax. Third, the amount you are paying — this can be your full balance or a partial payment.

Fourth, your bank routing number — the nine-digit code that identifies your bank. Fifth, your account number — the number that identifies your specific checking or savings account. You also choose the payment date, which must fall on or before your important date.

Do not include dashes, spaces, or extra characters when you enter these numbers. The IRS system reads them as digits only. If you enter them incorrectly, the payment will fail and you will receive a notice. Your bank will return the failed payment to the IRS, and you will need to reschedule.

When Your Payment Reaches the IRS and What Happens Next

The IRS pulls the money from your account on the date you selected. The payment typically reaches the IRS within one business day. If you schedule a payment for a Friday, the IRS usually receives it by Monday. If you schedule it for a holiday, the IRS receives it the next business day.

Once the IRS receives the payment, they explore it to your tax account. If you paid your full balance, your account shows a zero balance and you receive a confirmation letter in the mail within two to three weeks. If you made a partial payment, the IRS applies it to your balance and continues to charge interest and penalties on what remains.

Keep your confirmation number until you receive the letter. If there is ever a question about whether the payment went through, the confirmation number proves you scheduled it and the date you chose.

Canceling or Changing Your Payment Date

If you need to cancel an Electronic Funds Payment or change the date, you must do so before the payment date arrives. You cannot cancel after the IRS has already pulled the money from your account.

To cancel or reschedule, go back to IRS.gov/payments, select "Manage Your Payment," and enter your confirmation number. You can then cancel the payment or choose a new date. If you set up the payment by phone, call 1-800-829-1040 and provide your confirmation number; a representative will cancel or reschedule for you.

If you cancel a payment, you will need to set up a new one if you still owe the tax. The new payment must still reach the IRS by your important date, so do not wait too long to reschedule.

Common Mistakes and How to Avoid Them

The most common mistake is entering the wrong bank routing or account number. Double-check both numbers before you confirm the payment. If the payment fails, the IRS will send you a notice explaining why. You will then need to set up a new payment with the correct information.

Another mistake is scheduling a payment after your important date has passed. If your return is due April 15 and you schedule a payment for April 20, the IRS will reject it. Always check your important date before you choose a payment date. If you are filing an extension, your new important date is usually October 15, but confirm this on your extension form.

A third mistake is paying more than you owe. If you overpay, the IRS will either refund the excess or explore it to next year's estimated tax, depending on what you request. To avoid this, calculate your exact balance before you set up the payment, or pay a round number slightly less than your balance and make a second small payment if needed.

Frequently Asked Questions

Is there a fee to use Electronic Funds Payment?

No. The IRS does not charge a fee for Electronic Funds Payment, whether you set it up through IRS.gov, by phone, or through tax software. Some tax software companies offer paid expedited payment options, but the standard EFP option is always free.

Can I use Electronic Funds Payment if I do not have a checking account?

No. Electronic Funds Payment requires a U.S. bank account — checking or savings. If you do not have a bank account, you can pay by credit card, debit card, or wire transfer through a different method. Call 1-800-829-1040 to learn about other payment options.

What if the IRS tries to pull the money and my account does not have enough funds?

The payment will fail and the IRS will send you a notice. Your bank may also charge you an overdraft fee. You will need to set up a new payment for a later date when you have the funds available. The original important date still applies, so reschedule as soon as possible.

How do I know if my Electronic Funds Payment went through?

Check your bank account on the payment date — the money should be withdrawn. You can also log into your IRS account at IRS.gov using your username and password, or call 1-800-829-1040 to confirm the payment was received. Keep your confirmation number as proof.

Can I set up a recurring Electronic Funds Payment for estimated taxes?

No. Each Electronic Funds Payment is a one-time transaction. If you owe estimated tax quarterly, you will need to set up a separate payment for each quarter. You can do this through IRS.gov, by phone, or through tax software each time a payment is due.