IRS payment plan and online installment agreement
Eligible individuals can use the Internal Revenue Service (IRS) online payment-agreement service to request time to pay a tax balance. Choose between a short-term plan and monthly installments. Setup fees depend on the plan and payment method; interest and applicable penalties continue until the balance is paid.
Who can apply for an IRS payment plan online?
For the online monthly installment plan, the IRS lists a combined tax, penalty, and interest balance of $50,000 or less, with all required returns filed. For the short-term online plan, the listed balance must be less than $100,000.
These are the eligibility limits for this online route, not a determination that a taxpayer outside them has no payment options. Follow the IRS instructions for another application method when the online service does not fit the account.
What is the difference between short-term and monthly plans?
The short-term plan gives up to 180 days to pay the balance and has no setup fee. A monthly installment agreement spreads payments according to its approved terms. Paying in full remains another option.
Compare the complete obligation rather than the setup fee alone. Interest and applicable penalties continue on an unpaid balance. A plan approval is permission to pay according to the agreement, not a reduction of the underlying balance.
How much does an online payment agreement cost?
The current online monthly setup fee is $29 for direct debit or $69 for non-direct-debit payments. Low-income taxpayers can have a waiver or reduced/reimbursable fee under the IRS conditions. Applying by phone, mail, or in person can cost more.
A direct-debit plan uses automatic withdrawals from a checking account. If choosing that method, have the bank routing and account numbers ready. A separate card-processing fee can apply to payments made by card.
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Open the IRS payment-agreement page and use Apply/Revise as individual. Create or sign in to the Individual Online Account, then enter the information requested about the balance and chosen payment arrangement. Account setup requires identity verification.
If you recently filed and have no balance notice yet, the IRS says to use the balance due on the return. After submitting, the online service provides an immediate approval or non-approval notification. Keep the decision, payment amount, due date, and withdrawal details.
What if I cannot afford the proposed monthly payment?
There is no one minimum payment stated here for every taxpayer. The online service checks whether the proposed amount meets its requirements. If it does not, it prompts you to revise the amount or gives instructions for additional forms and financial information.
The current instructions identify Form 9465 and a collection-information form among the alternatives when the online minimum cannot be met. Follow the route for your situation rather than choosing an amount that the agreement has not approved.
Can I change an existing installment agreement?
Use the same online Apply/Revise route to review available changes. The IRS lists changes to the monthly amount, payment date, direct-debit method, bank information, and certain reinstatements. A revision or reinstatement fee can apply.
A requested change must be completed through the agreement process. Keep the new confirmation and follow the approved terms. Merely editing bank information elsewhere or paying a different amount does not itself establish a revised agreement.
FAQ
Can a sole proprietor use the individual application?
The IRS directs sole proprietors and independent contractors to apply as individuals.
Can a business account apply through this online route?
The current IRS page directs business accounts to call rather than use the online application for an individual plan.