IRS payment plan options
Individual taxpayers may qualify for either a short-term or long-term payment plan:
| Plan | Online eligibility | Setup fee |
|---|---|---|
| Short-term payment plan | Owe less than $100,000 in combined tax, penalties, and interest and can pay within 180 days | $0 |
| Long-term payment plan | Owe $50,000 or less in combined tax, penalties, and interest and have filed all required returns | Varies by application and payment method |
Source: Internal Revenue Service
Note: Penalties and interest continue to accrue until you pay the balance in full, even while you’re making payments under a plan.
How to apply for an installment agreement
- Create or log into your IRS Online Account to verify your identity and see your current balance.
- Apply through the IRS Online Payment Agreement tool if you’re eligible, or mail Form 9465 (Installment Agreement Request) if you’re applying by paper.
- Choose your payment method, such as direct debit from a bank account or monthly manual payments.
Applying online typically gives you an immediate decision, while mailing Form 9465 can take longer because the IRS has to process the request.
IRS installment agreement costs, fees, and low-income waivers
For a long-term plan, current setup fees include:
- Online with direct debit: $29
- Phone, mail, or in person with direct debit: $107
- Online without direct debit: $69
- Phone, mail, or in person without direct debit: $178
Low-income taxpayers with adjusted gross income at or below 250% of the applicable federal poverty level may qualify for reduced, waived, or reimbursed fees. If you qualify as low income and cannot use direct debit, the $43 non-direct-debit fee may be reimbursed after you complete the agreement.
What happens if you miss a payment
If you miss a scheduled payment, your agreement can go into default. The IRS generally sends written notice and gives the taxpayer 30 days to comply before terminating an installment agreement, except in jeopardy cases. Also, a missed installment is not the only default trigger; a new unpaid tax liability or another failure to meet the agreement terms can also cause default.
If the agreement is terminated, the IRS may resume collection action, and you could have to pay a reinstatement fee. Penalties and interest also continue to accrue on the unpaid balance until it’s paid in full.
In some cases, unpaid federal tax debt can also lead to a Federal Tax Lien, which establishes the government’s legal claim against your property.
