Your payment plan options
- Short-term payment plan. If you can pay in full within 180 days and owe less than $100,000, you can request extra time to pay. There's no setup fee, though penalties and interest continue.
- Streamlined installment agreement. Individuals who owe $50,000 or less in combined tax, penalties and interest can generally set up monthly payments of up to 72 months without a detailed financial statement.
- Larger balances. Above $50,000, the IRS generally requires financial disclosure, and the monthly payment is based on what it calculates you can afford. Paying the balance down below the threshold can sometimes qualify you for the streamlined route.
- Businesses with smaller balances may qualify for an in-business installment agreement for payroll and other business taxes.
What a payment plan does and doesn't do
- It generally stops levies while the agreement is in place and in good standing.
- Interest continues to accrue. For individuals who filed on time, the failure-to-pay penalty drops from 0.5% to 0.25% per month while an installment agreement is in effect.
- You must file all future returns and pay future taxes on time, or the agreement can default.
- Setup fees vary by plan type and payment method, and are reduced or waived for low-income taxpayers. Direct debit is the cheapest and most reliable option.
When to consider something else
If you can't afford any payment, currently-not-collectible status may pause collection. If you could never realistically pay the full balance before the collection period runs out, an Offer in Compromise may be worth evaluating.
Frequently asked questions
How much will my monthly IRS payment be?
For streamlined agreements, enough to pay the balance within 72 months. For larger balances, the IRS generally sets the payment based on your income and allowable expenses.
Will a payment plan stop a levy?
Generally, yes. The IRS won't levy while an installment agreement request is pending or while an agreement is in effect and you're keeping its terms.
Do penalties and interest stop?
No, but for individuals who filed on time, the failure-to-pay penalty is reduced to 0.25% per month while an installment agreement is in effect.
Can I set up a payment plan if I haven't filed all my returns?
Generally, you'll need to file all required returns first. We can help with both.