IRS Payment Plan: How It Works & How to Apply

There are different IRS payment plans, and you can get on an installment plan on your own — maybe even for free.
Tina Orem
Sabrina Parys
By Sabrina Parys and  Tina Orem 
Edited by Chris Hutchison
How to Set Up an IRS Payment Plan

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.


An unexpected tax bill is a surprise few people want to encounter when filing their tax returns. And when that balance turns out to be more than you can afford, it's easy to feel overwhelmed.

Thankfully, the IRS has a few tax payment plans that can help you tackle your bill over time. You can set one up by yourself online, by phone or in person. Interest and penalties will still apply as you pay off your debt, but these fees can be lower than those you might incur when, say, putting your entire tax debt on a high-interest credit card.

Most importantly, don't put off filing your return because of a tax bill. Doing so could result in additional late-filing fees for each month or part of the month your return is late. Instead, consider filing your return, paying what you're able to and looking into an IRS payment plan or other tax debt relief options.

Track your finances
A NerdWallet account is the smartest way to track your savings, credit cards, and investments together in one place.

What is an IRS payment plan?

An IRS payment plan is an agreement you make directly with the agency to pay your federal tax bill over a certain amount of time. The IRS offers short-term payment and long-term payment plan options.

Short-term payment plan

  • A short-term tax payment plan gives taxpayers the option to pay off their tax debt in either 90 or 180 days.

Long-term payment plan (installment agreement)

  • A long-term tax payment plan, also sometimes called an installment agreement, gives taxpayers who may need more than 180 days to settle their tax bill the option to pay off their tax debt in monthly installments.

Which plan makes sense for you depends on how much you owe and how quickly you think you can pay your balance off. As long as you're keeping up with your plan, the agency usually won't issue a tax levy or a tax lien.

Internal Revenue Service. Additional Information on Payment Plans. Accessed Apr 12, 2023.

Note that getting on an IRS payment plan doesn’t get you out of interest and penalties for late payment. Those accrue until your balance is zero.

Who is eligible for an IRS payment plan or installment agreement?

You can apply online for a short- or long-term plan via the IRS' Online Payment Agreement tool if you meet the following criteria:

  • Short-term payment plan: You owe less than $100,000 in combined tax, penalties and interest, you’ve filed all your tax returns, and you can finish paying off your tax debt in either 90 days or less, or 180 days or less.

  • Long-term payment plan: You owe $50,000 or less in combined tax, penalties and interest, you’ve filed all your tax returns, and you may need more than 180 days to pay your tax bill.

If the tool determines that you're ineligible, the IRS says you may still be able to apply for a tax installment plan by either filing Form 9465 or calling the IRS' main hotline to apply by phone.

Internal Revenue Service. Additional Information on Payment Plans. Accessed Apr 12, 2023.

How to apply for an IRS payment plan

If you qualify for a short- or long-term payment plan, the fastest way to apply is online, through the IRS' payment plan application portal.

Internal Revenue Service. Apply Online for a Payment Plan. Accessed Mar 10, 2023.

You can also apply for an IRS payment plan by mail (fill out IRS Form 9465) or by phone (call the IRS' main number).

Applying for an IRS payment plan online

If you’ve previously registered for an online IRS account to get a tax transcript or an identity protection PIN, you can log into the IRS' Online Payment Agreement tool with the same user ID and password. If not, you’ll need to create an account to confirm your identity, which means having the following information on hand:

  • A valid email address and access to your email.

  • Photo identification (driver's license, state ID, passport).

  • Your Social Security number or individual tax ID number.

  • Access to a smartphone or webcam to verify your identity.

  • Access to a phone or email for multi-factor authentication.

If you need assistance with verifying your information or require accessibility help, visit the help page for more information.


Get ready for simple tax filing with a $50 flat fee for every scenario

Powered by

ColumnTax Logo

Don’t miss out during the 2024 tax season. Register for a NerdWallet account to gain access to a tax product powered by Column Tax for a flat rate of $50 in 2024, credit score tracking, personalized recommendations, timely alerts, and more.

checkmarkNo hidden upgrades and fees
checkmarkIncludes federal and state

for a NerdWallet account


Minimum monthly payments for IRS installment plans

In general, if you have a long-term payment plan, you can choose how much you pay every month. That is, the IRS will ask you what you can afford. However, you must choose a payment amount that will pay off your debt within 72 months.

Taxpayer Advocate Service. Payment Plans. Accessed Mar 10, 2023.

What are the fees for an IRS payment plan?

The cost of an IRS payment plan depends on which plan you choose, how you apply for the plan, and whether you qualify for a fee reduction.

If you’re a low-income taxpayer, the IRS waives the user fee if you agree to let it make automatic withdrawals from your bank account for the payments. If you qualify as a low-income taxpayer but are unable to make electronic debit payments, the IRS will reimburse you for the user fee when you pay off your balance.

Generally, to qualify as a low-income applicant your adjusted gross income is at or below 250% of the federal poverty level. (See if you qualify on IRS Form 13844.)

Payment plan type

Maximum you can owe to qualify

Setup fee & payment methods

Short-term payment plan (180 days or less)

$100,000 in combined tax, penalties and interest.

$0 to apply online, by phone, by mail or in person. Pay balance by:

  • Withdrawals from your checking account or savings account (Direct Pay),

  • E-pay online or by phone via the IRS's Electronic Federal Tax Payment System, or

  • Check, money order or debit/credit card.

Long-term payment plan (more than 180 days)

$50,000 in combined tax, penalties and interest.

If you pay through automatic debit withdrawals:

  • $31 setup fee to apply online.

  • $107 setup fee to apply by phone, mail or in person.

  • Setup fee may be waived for low-income taxpayers.

If you pay by another method (e.g., Direct Pay, EFTPS or money order):

  • $130 setup fee to apply online.

  • $225 setup fee to apply by phone, mail or in person.

  • $43 setup fee for low-income taxpayers; may later be reimbursed.

A few other fee-related details to note:

  • If you make your payments with a debit or credit card, you’ll have to pay a processing fee. The charge for debit cards runs about $2 to $4 per payment; the charge for credit cards can be up to 2% of the payment.

  • If you owe more than $25,000, you have to make your payments via automatic withdrawals from a bank account (“direct debit”).

    Internal Revenue Service. Additional Information on Payment Plans. Accessed Apr 12, 2023.

How do I make changes to an IRS payment plan?

The IRS' Online Payment Agreement tool lets you change your monthly payment amount, change the monthly due date, sign up for automatic withdrawals and reinstate a payment plan you’ve fallen behind on.

  • If your new monthly plan does not meet IRS requirements, you may need to adjust the payment amount.

  • If you can't afford the monthly payment amount, you may need to fill out Form 9465 and Form 433-F (collection information statement).

Can I apply for an IRS payment plan myself?

Yes. You are not required to pay a third party to apply for a payment plan.

If you do hire a tax-relief company to help you settle your debt, you may have to give it power of attorney to apply for an IRS payment plan on your behalf. And proceed with caution and do your research, as the Federal Trade Commission warns on its website:

“The truth is that most taxpayers don’t qualify for the programs these fraudsters hawk, their companies don’t settle the tax debt, and in many cases don’t even send the necessary paperwork to the IRS requesting participation in the programs that were mentioned. Adding insult to injury, some of these companies don’t provide refunds, and leave people even further in debt.”

Federal Trade Commission. Tax Relief Companies. Accessed Feb 13, 2023.

Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.