Paying your California Franchise Tax Board (FTB) balance comes with options, but not all are cost-effective. Should you pay by ACH (bank debit) or credit card? This blog compares both methods for the 2025 tax year so you can avoid hidden fees and make the smartest choice for your business or personal tax obligations.
Payment Methods Accepted by the FTB
The California FTB allows you to pay using:
- ACH Debit (Bank Transfer) via Web Pay – Free
- Credit Card – Accepted via third-party processor, with fee
- Check or Money Order – Slower and harder to track
- Western Union / MoneyGram – For international or cash-based taxpayers
For speed and accuracy, Web Pay (ACH debit) and credit card payments are the two primary online options.
ACH Debit via Web Pay – Best for Businesses and Individuals
Cost:
- Free , No processing fee
- Best for: LLCs, corporations, sole proprietors, and individuals
How it works:
- You authorize the FTB to debit your bank account directly
- You receive instant confirmation and a reference number
- Option to schedule payment for a future date (timing flexibility)
Risks:
- Requires accurate bank info
- No rewards or cash-back
Credit Card Payment – Convenient but Costly
Cost:
- 2.3% service fee (as of 2025), paid to the third-party processor (ACI Payments, Inc.)
- On an $800 LLC payment, fee = $18.40
Benefits:
- Earn points or rewards
- Possible to use for cash-flow flexibility
Risks:
- High fees, especially for large balances
- Not processed directly by FTB
- Refunds can take longer in case of errors
Comparison Table: ACH vs Credit Card
| Feature | ACH Debit (Web Pay) | Credit Card |
|---|---|---|
| Processing Fee | $0 | 2.3% |
| Speed | Immediate | Immediate |
| Confirmation | Yes | Yes |
| Best For | All taxpayers | Low-balance payers only |
| Penalty Risk | Low (direct FTB system) | Slightly higher (third-party) |
| Scheduling Option | Yes | No |
Step-by-Step: Pay Using ACH (Recommended)
- Visit the Web Pay for Businesses or Individuals page on the FTB site
- Select your entity type or individual filing status
- Enter identification details (Entity ID or SSN)
- Choose the payment type (e.g., Form 3522 for LLC tax)
- Enter bank details and the payment amount
- Confirm the submission and save your reference number
Conclusion
For most taxpayers, ACH (Web Pay) is the cheapest and most efficient way to pay the California FTB. Credit cards may be convenient, but the processing fee often outweighs the benefits unless you’re optimizing points or managing short-term cash flow. For 2025, avoid unnecessary fees and stick with bank debit wherever possible.
Call to Action
Still unsure which payment method is best for your situation? Schedule a consultation with Anshul Goyal, CPA, EA, FCA to make safe and cost-effective FTB payments for your business or personal taxes.
Disclaimer:
This blog is for informational purposes only and should not be considered legal, accounting, or tax advice. Every tax situation is unique, and readers are advised to consult a qualified professional before making decisions.
Top 5 High-Searched FAQs
1. Is there a fee for paying the CA FTB with a credit card?
Yes. The third-party processor charges approximately 2.3% of the total payment.
2. Can I avoid fees by using ACH debit?
Yes. ACH via Web Pay is free and recommended.
3. What is the safest way to pay the CA $800 LLC tax?
ACH debit through Web Pay for Businesses is safe and direct.
4. Can I earn rewards by paying taxes with a credit card?
Yes, but the processing fee may cancel out the rewards.
5. Will I get a receipt when paying online?
Yes. Both ACH and credit card methods provide immediate confirmation.
About Our CPA
Anshul Goyal, CPA, EA, FCA helps taxpayers and business owners choose the most cost-efficient payment methods for state and federal tax compliance. He regularly advises on tax optimization, penalty avoidance, and filing accuracy.