IRS Payment Plan or Installment Agreement: Options and How to Get One by Yourself

There are different kinds of IRS payment plans, and you can get one on your own — maybe even for free.

Tina OremJuly 27, 2020
How to Set Up an IRS Payment Plan

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If you can’t pay your taxes, one option might be an IRS payment plan — if you know the rules.

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. There are two kinds of IRS payment plans: short-term and long-term.

Typically you'll make monthly payments to settle what you owe. So long as you're keeping up with that, the IRS usually won't garnish your wages or seize any bank accounts or property. But 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.

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.

Plan option

Setup fee

Maximum you can owe

Short-term payment plan (120 days or less)

  • $0 to apply online or by phone, mail or in-person.

  • Pay by automatic withdrawals from your checking account or by check, money order or debit/credit card.

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

Long-term payment plan* (120 days or more)

  • If you pay through automatic withdrawals: $31 to apply online; $107 to apply by phone, mail or in-person. (Fees waived for low-income applicants.)

  • If you pay with another method: $149 to apply online; $225 to apply by phone, mail or in-person. (Fees reduced to $43 for low-income applicants, and may be reimbursed in certain circumstances.)

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

* Also called an “installment agreement” or a Direct Debit Installment Agreement (DDIA)

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

  • 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 is about 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”).

  • As part of the government's ongoing coronavirus response, people who already have installment agreements did not have to make payments due between April 1 and July 15, 2020. The IRS also won't deem any installment agreements in default during that period, but interest will still accrue on unpaid balances.

Some tax rules have changed due to coronavirus

As part of the U.S. government's ongoing response to the coronavirus, the tax deadline is now July 15, 2020. Learn more about this and what else is different this year for taxpayers.

How do I set up a payment plan with the IRS?

You don’t need to call the IRS to get on a payment plan. You can apply online if either of these situations apply to you:

  • You’re applying for a long-term payment plan, you owe $50,000 or less in combined tax, penalties and interest, and you’ve filed all your tax returns.

  • You’re applying for a short-term payment plan and you owe less than $100,000 in combined tax, penalties and interest.

You’ll need to confirm your identity, which means having the following information on hand:

  • Name exactly as it appears on your most recently filed tax return.

  • A valid email address.

  • Address from your most recently filed tax return.

  • Date of birth.

  • Filing status.

  • Your Social Security number or Individual Tax ID Number.

  • Balance due amount.

  • Financial account number, mobile phone registered in your name or an activation code received by mail (takes five to 10 business days).

Here's a potential timesaver: If you’ve previously registered for a tax transcript, Identity Protection PIN or another online payment agreement, you probably can log in with the same user ID and password.

Or you can fill out IRS Form 9465 and mail it to the IRS.

Making changes to an IRS payment plan

The IRS offers an online tool that 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. However, that works only if you’re not making payments through direct debit.

  • If you’re on a plan where the payments are coming out of your bank account automatically, you have to contact the IRS directly.

  • There might be a reinstatement fee if your plan goes into default.

  • As part of the government's ongoing coronavirus response, the IRS also didn't deem any installment agreements in default between April 1 and July 15, 2020.  But interest will still accrue on unpaid balances. Call your bank directly to stop payments if you want to suspend direct debit payments during this period. You can call the IRS, too, but it may be difficult to reach an assistor. Banks are required to comply with customer requests to stop recurring payments within a specified timeframe. You need to resume payments after July 15 if you want to avoid possible default on your agreement, so be sure to tell the bank to resume the payments at least two weeks before your next payment is due.

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, 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,” it states.

Find the tax relief company that's best for you

We've weighed the pros and cons of some major players in the space.




  • $250-$750 discovery fees.

  • $1,500-$4,000 resolution fees.

  • Dedicated case manager.

  • Phone, email, chat or by mail.

  • Refunds possible but somewhat limited.

Free initial consultation.

  • $495 discovery fee.

  • $1,500-$4,000 resolution fees (on average; depends on case specifics).

  • Dedicated case manager.

  • Phone, email or by mail.

  • Refunds limited/case-by-case basis.

Free initial consultation.

  • $399 discovery fees.

  • $1,400 resolution fees (on average, per the company).

  • Most case managers are also enrolled agents or CPAs.

  • Phone, email, chat or by mail.

  • Refunds possible but somewhat limited.

Free initial consultation.

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