Reward is known to affect visual search performance. Rewarding targets can increase search performance, whereas rewarding distractors can decrease search performance. We used subcomponents of the N2pc in the event‐related EEG, the NT (target negativity) and ND/PD (distractor negativity/positivity), in a visual search task to disentangle target and distractor processing related to reward. The visual search task comprised homogeneous and heterogeneous contexts in which a target and a colored distractor were embedded. After each correct trial, participants were given a monetary reward that depended on the color of the distractor. We found longer response times for displays with high‐reward distractors compared to displays with low‐reward distractors, indicating reward‐induced interference, however, only for heterogeneous contexts. The NT component, indicative of attention deployment to the target, showed that target selection was impaired by high‐reward distractors, regardless of the context homogeneity. Processing of distractors was not affected by reward in homogeneous contexts. In heterogeneous contexts, however, high‐reward distractors were more likely to capture attention (ND) and required more effort to be suppressed (PD) than low‐reward distractors. In sum the results showed that, despite the fact that target selection is impaired by high‐reward distractors in both homogeneous and heterogeneous background contexts, high‐reward distractors capture attention only in scenarios that foster attentional capture.