Does the arrival of spring mean you have to pay taxes? Turn this obligation into an opportunity! Plastiq, Chexy and PaySimply payment platforms let you pay your taxes by credit card for a reasonable service fee.
These services are fully legitimate and officially recognized by the Canada Revenue Agency. Here you can make all your tax payments: federal and provincial taxes, instalments and business taxes.
By using a carefully selected credit card, you can benefit from attractive cash rebates or unlock a welcome bonus to earn lots of rewards points.
Here are our top strategies for maximizing your returns by paying your taxes by credit card this year.
We recommend using these platforms for two scenarios only:
It’s important to know that a payment made with Plastiq, Chexy or PaySimply will be categorized as an other expense by your credit card, which is generally the category that earns the least cash back or rewards.
So, unless your credit card offers you more than 2.49% (PaySimply and Plastiq fees) or 1.75% ( Chexy fees) cashback, you’ll be losing money by using this service to pay your taxes by credit card.
Let’s see the two scenarios where using PaySimply or Plastiq can be an profitable option for you.
To maximize the return on your tax payments in the form of cash back, you should choose to pay with a card:
Here are the credit cards that meet these criteria if used in accordance with the welcome bonus requirements:
To see what kind of return you can get on $4,500 in tax payments, let’s take the CIBC DividendMD Visa Infinite* Card and the Scotia Momentum Visa Infinite Card with Chexy as examples.
By taking advantage of the welcome offers of these two cards, I will be able to:
I’ll get a total of $450 cash back on my tax payments.
Since I’ll have paid a 1.75% fee (or $78.75) on these two payments through PaySimply, I’ll get a net return of $371.25 by using these welcome offers to pay $4,500 in taxes.
In total, I get 8.25% net cash back on up to $4,500 in tax payments with Chexy.
Plus, there’s no annual fee on either card for the first year!
Here are the details of each of these cards.
The CIBC Dividend® Visa Infinite* Card is one of the best Visa credit cards with cash back in Canada.
Right now, with this welcome offer, get a 10% welcome bonus in the form of up to $250 cash back (period covered by your first 4 statements) and a rebate on your first year’s annual fees†!
Plus, receive $50 cash back when you set up a pre-authorized payment within the first 4 months.
With this CIBC cash back credit card, you earn:
For example, if you spend $1,000 per month on groceries and/or gas and/or electric vehicle charging, you’ll earn $40 cash back per month or $480 cash back per year with this card for this category of purchases!
And that’s not counting the other purchases you’ll make with this card and the advantages it offers (particularly in terms of insurance).
And this CIBC Cash Back Credit Card offers many insurance coverages:
The Scotia Momentum® VISA Infinite* card is recognized year after year as one of the best cash-back credit cards in Canada.
Currently, there is no annual fee in the first year, including on additional cards. And you can earn 10% cash back on all purchases for the first three months (up to $2,000 in total purchases).
With the Scotia Momentum® VISA Infinite* card, you get:
For example, if you spend $1,000 per month on groceries and/or recurring payments, you’ll earn $40 cash back per month, or $480 cash back per year with this card for this category of purchases! And that’s not counting the other purchases you’ll make with this card and the advantages it offers (particularly in terms of insurance).
If you rent, for example, you could use the Scotia Momentum® Visa Infinite* Card on the Chexy website to pay your rent and get 4% cash back!
The Scotia Momentum® VISA Infinite* card is an excellent Visa credit card for cash back.
And its insurance benefits are excellent!
The other option for using Plastiq, Chexy or PaySimply is to reach a spending threshold that will unlock a welcome offer on a credit card.
This can be particularly useful for high-end credit cards, which often require a significant level of spending in the first few months to earn bonus points.
For example, you need to spend $10,000 in three months to get the American Express Platinum Card® and $7,500 in three months for the American ExpressMD Business Gold Rewards Card.
Individuals can also subscribe to American Express corporate cards. Here’s how:
Here are other examples of credit cards that require a certain level of spending in the first few months to unlock very attractive welcome bonuses:
Note that these credit cards include many other benefits such as insurance, travel credits, free checked baggage and much more. Take the time to review them to see which one will be most beneficial to your travel habits and goals.
If you’d like one of these high-end cards, but they seem inaccessible due to the spending threshold required to unlock the welcome offer, your tax payments could help unlock this bonus.
You can also combine this strategy with gift cards to achieve a spending threshold.
Before you embark on the tax payment process, do your calculations to see if it’s worth it to sign up for new credit cards, and which one to sign up for based on the amount you’ll have to pay.
Tax season is never the happiest time of year when you owe money. At the very least, by using these strategies with PaySimply, Chexy and Plastiq, you can take advantage of them to earn cash back or rewards points that will help you finance some of your next trips!
Ready to try one of these options? Use our tutorials:
Yes, it’s perfectly legal. The Canada Revenue Agency (CRA) and Revenue Quebec do not allow credit card payments directly, but they do officially recognize third-party providers such as PaySimply and Plastiq, who offer this service for a fee.
PaySimply and Plastiq charge a 2.49% fee for tax payments made by Visa, Mastercard or American Express credit cards.
The best card depends on your objectives. For cash back, the CIBC Dividend® Visa Infinite* Card offers up to 4% on bill payment services, making tax payments potentially profitable despite the fees. If you’re aiming for travel points or a welcome bonus, Aeroplan cards or American Express cards with large welcome bonuses may be more advantageous. Ideally, you should calculate the value of the rewards you earn in relation to the fees you pay.
There’s nothing special to report on your tax return. Plastiq and PaySimply transmit your payment directly to the CRA or Revenue Quebec with all your identifying information. From the point of view of your tax return, it’s just as if you’d paid directly to the government. Just keep the transaction confirmation for your records.
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