IRS payment plans: costs, limits and how to apply

If you cannot pay your tax bill in full, the IRS lets you pay over time. Many people can apply online and hear right away whether the plan is approved: a short-term plan (180 days or less) if you owe less than $100,000, or a monthly long-term plan if you owe $50,000 or less and have filed every required return. A short-term plan has no setup fee, but on every kind of plan interest and penalties keep adding up until the balance is paid. Below: who can apply, what each plan costs, and how to keep it.

The two kinds of plans

Who can apply online

Before the IRS will consider a payment plan request, you must be current on all filing and payment requirements, and people in an open bankruptcy proceeding generally are not eligible.

Most individual taxpayers can get a Simple Payment Plan, a long-term plan for people who owe $50,000 or less in assessed tax, penalties and interest and are current on all filing and payment requirements. It does not need a collection information statement or a lien determination, and the IRS says more than 90% of individual taxpayers qualify.

If you owe more than the online limits, you can still ask for a plan by phone or mail. See the other kinds of plans below.

What to have ready

To apply online you create an IRS online account (a photo ID is needed), have your bank routing and account numbers ready if you choose direct debit, and, if you recently filed your return and have not received a balance notice, have the balance due shown on your return. You are told right away whether the plan is approved. Sole proprietors and independent contractors apply as individuals.

What an IRS payment plan costs

Penalties and interest keep adding up until the balance is paid in full. Fees as listed by the IRS (updated March 2026).

If your income is low

You count as low income if your adjusted gross income is at or below 250% of the federal poverty level. If you agree to pay by direct debit, the IRS waives the setup fee. If you cannot pay by direct debit, you pay a reduced $43 setup fee, which may be reimbursed if conditions are met. If the IRS did not identify you as low income, send Form 13844, Application for Reduced User Fee for Installment Agreements, within 30 days of the date on your installment agreement acceptance letter.

Interest and penalties keep adding up

For individuals, the IRS interest rate on underpayments is 7% per year, compounded daily, for the calendar quarter that began October 1, 2026. The IRS sets the rate again every quarter. The failure to pay penalty is 0.5% of the unpaid tax for each month or part of a month the tax stays unpaid, up to a maximum of 25%. If you filed your tax return on time as an individual and have an approved payment plan, the failure to pay penalty drops from 0.5% to 0.25% per month (or part of a month) while the plan is in effect.

The IRS can remove some penalties. See IRS penalty abatement for who qualifies and how to ask.

How much to pay each month, and for how long

A Simple Payment Plan, which you can set up online, by phone or at a Taxpayer Assistance Center, must pay the balance in full by the Collection Statute Expiration Date, generally 10 years from the date the tax was assessed; the longer the term you choose, the more interest and penalties you owe.

By mail, the Form 9465 instructions (revised July 2024) describe a streamlined agreement that pays the balance within 72 months or by the Collection Statute Expiration Date, whichever comes first. If the monthly payment you propose is less than your balance divided by 72, the form asks you to raise it or attach Form 433-F, Collection Information Statement. If you leave the amount blank, the IRS divides your balance by 72. Pay as much as you can each month, because interest and penalties keep adding up.

Other kinds of IRS payment plans

Guaranteed Installment Agreement

The IRS names one type a Guaranteed Installment Agreement. You are eligible if you are an individual who owes $10,000 or less in tax (not counting interest and penalties) and you filed all income tax returns on time and paid any income tax due during the past 5 years, had no installment agreement for income tax during those 5 years, agree to pay in full within 3 years and follow the tax laws while the agreement is in effect, and cannot pay the liability in full when due.

Partial payment plan

If you cannot afford to pay in full by the Collection Statute Expiration Date, a partial payment installment agreement may be an option. You must give the IRS a Collection Information Statement and supporting financial information, the IRS decides whether to file a public Notice of Federal Tax Lien, and an approved agreement is reviewed every two years to see whether your payment should change.

If you owe more than the online limits

If you do not qualify for a Simple Payment Plan or a Guaranteed Installment Agreement, you may still be eligible for another plan, but the IRS may require a Notice of Federal Tax Lien determination and a Collection Information Statement (Form 433-F, 433-A or 433-B).

How to apply for an IRS payment plan

1. File any missing returns first (see how to file back taxes, and deadlines and extensions).
2. Check what you owe. Your IRS online account shows balances owed by tax year. Go to the IRS online account page.
3. Go to the IRS online payment agreement application and sign in to your IRS online account.
4. Choose automatic bank payments if you can: it has the lowest setup fee and helps you pay on time.
5. If you cannot apply online, individuals can mail Form 9465, Installment Agreement Request (with Form 433-F, Collection Information Statement, if the form instructions require it) or apply by phone at 800-829-1040, or at the number on the bill or notice. If you mail Form 9465, the IRS typically responds within 30 days, but it may take longer during filing season. The online application gives an immediate answer.
6. Set up your payments. After you apply, you can pay from a checking or savings account with Direct Pay, through your IRS online account, by phone with the Electronic Federal Tax Payment System (enrollment required), or by check, money order or debit or credit card. Fees apply when paying by card.
7. Keep every payment on time, as explained below.

What happens after you apply

The IRS says it will generally not take enforced collection actions while a payment plan is being considered, while a plan is in effect, for 30 days after a request is rejected or a plan is terminated, or while it evaluates an appeal of a rejected or terminated agreement.

Not paying your taxes when they are due may cause the IRS to file a Notice of Federal Tax Lien or start a levy. If the IRS does start a levy, see IRS wage garnishment and levies for what it can take and how a levy is released.

Keep your payment plan in good standing

• To avoid default, pay at least your minimum monthly payment when it is due, and file all required tax returns on time and pay all taxes in full and on time.
• Your future refunds will be applied to your tax debt until it is paid in full, and you must still make every scheduled payment even if the IRS applies a refund to your balance.

If you cannot pay new taxes in full and on time, the IRS says to contact it to change your agreement. Tell the IRS if you move (Form 8822, Change of Address). A plan that goes into default may carry a reinstatement fee, and penalties and interest continue until the balance is paid in full.

If you miss a payment

If you default, the IRS can send notice CP523, which says it intends to end your installment agreement and levy your wages or bank accounts. Make the missed payment before the termination date on the notice, and contact the IRS right away, no later than 30 days from the date of the notice, to ask about reinstating the agreement. You may have to pay a fee to reinstate the agreement or pay any new tax liability in full. If you disagree with the IRS reason, you can appeal to the IRS Independent Office of Appeals. For any IRS letter, see what to do with an IRS notice.

Change a payment plan you already have

In your IRS online account you can change your monthly payment amount or due date, switch to direct debit, change the bank account on a direct debit plan, and reinstate a plan after default.

Changing a plan costs $6 online or $89 by phone, mail or in person. For low income taxpayers the fee is $6 online or $43 by phone, mail or in person, and either may be reimbursed if certain conditions are met. For low income taxpayers, the IRS also lists a $0 fee for changes made to an existing direct debit agreement. A plan reinstated after default may carry a reinstatement fee.

If you cannot afford a payment plan

If paying even a small amount each month would keep you from meeting basic living expenses, the IRS has two other paths. Neither is automatic: you have to ask, and the IRS decides.

• Offer in compromise. An agreement between you and the IRS that resolves your tax liability for an agreed, reduced amount. There are eligibility rules, and an application fee and first payment unless you meet the IRS low-income qualifications. See offer in compromise: the basics.
• Currently not collectible. If you cannot pay any of what you owe because paying would keep you from meeting basic living expenses, you can ask the IRS to delay collection. If it agrees, it may report your account as currently not collectible until your financial condition improves. That does not make the debt go away. Interest and penalties keep adding up, the IRS reviews your ability to pay from time to time, and it may still file a Notice of Federal Tax Lien. The IRS may ask for a Collection Information Statement and proof of your finances first.

Free help with an IRS balance

• Low Income Taxpayer Clinics: Low Income Taxpayer Clinics represent people in audits, appeals and collection disputes with the IRS, for free or a small fee. Clinics generally serve people with income at or below 250% of the federal poverty guidelines (for 2026, $39,900 for a single person in the 48 contiguous states and D.C.; Alaska and Hawaii have higher figures). Each clinic decides whether you qualify. Clinics are independent of the IRS. Find a clinic.
• Taxpayer Advocate Service: an independent organization within the IRS that may be able to help with a tax problem you have not been able to resolve with the IRS, and its service is free if you qualify. Contact TAS.

When a tax professional makes sense

Many people set up a plan on their own. A tax professional (a CPA, enrolled agent, tax attorney or tax firm) can help if you owe more than the online limits, the IRS turned down your request, or you also have years of returns to file. Ask about the fee up front. Our guide to paid tax help explains how to choose.