Can't pay in full? Payment plans and your options
The two kinds of IRS payment plan, who can apply online, the fees, and what keeps running or ends a plan.
The IRS offers a short-term plan, paid in full within 180 days with no setup fee, and a long-term installment agreement, paid monthly with a setup fee of $29 to $178 depending on how you apply and pay. Interest keeps running on the unpaid balance, and so does the failure-to-pay penalty, which drops from 0.5% to 0.25% a month during an installment agreement for an individual who filed on time.
Last reviewed September 23, 2026 · Tax year 2026 · Federal
The Code lets the IRS accept a tax balance in installments by written agreement.
Two kinds of plan
- Short-term plan. You pay the full balance within 180 days, with no setup fee.
- Long-term plan, or installment agreement. You pay monthly, and a setup fee applies. Up to $50,000, a plan paying within 72 months generally needs no financial statement, provided that over $25,000 you pay by direct debit or payroll deduction.
Applying
An individual can apply online for a long-term plan when combined tax, penalties and interest come to $50,000 or less and all required returns are filed, and for a short-term plan when the total is under $100,000. A sole proprietor or independent contractor applies as an individual. Businesses cannot apply online. The paper request for individuals is Form 9465, with Form 433-F attached when the balance is over $50,000.
The IRS must grant a guaranteed installment agreement if you owe $10,000 or less of individual income tax, not counting interest and penalties, and the plan pays it within 3 years. The other conditions are that in the past 5 years you (and your spouse, on a joint return) filed and paid on time and had no installment agreement, that you cannot pay in full now, and that you comply with the tax law while the plan runs.
Fees
The fees are set by regulation. The table is the IRS payment plans page as it read on September 23, 2026; some amounts are lower than the regulation's 2016 text, which the Code now treats as a ceiling.
- Short-term (180 days or less). Apply online: $0. Apply by phone, mail or in person: $0.
- Long-term, direct debit. Apply online: $29. Apply by phone, mail or in person: $107.
- Long-term, other payment methods. Apply online: $69. Apply by phone, mail or in person: $178.
- Change an existing plan. Apply online: $6. Apply by phone, mail or in person: $89.
Changing an existing direct debit plan costs $0.
If your adjusted gross income is at or below 250% of the federal poverty level, the setup fee is waived for a plan paid by direct debit. For a plan paid another way, the fee is $43. If you are unable to pay by direct debit, that fee is refunded when you complete the plan.
What keeps running
Interest runs from the original due date until you pay, and an installment agreement does not move that date. Neither does an extension; see An extension gives you more time to file, not to pay.
The failure-to-pay penalty is 0.5% of the unpaid tax a month, up to 25%. If you are an individual and filed the return by its due date, extensions included, the rate is 0.25% for each month an installment agreement is in effect.
What can end a plan
The IRS can change or end a plan if you miss an installment, fail to pay other tax when due, or do not provide a requested financial update. It can also act on inaccurate information or a significant change in your finances. In each of these cases, a missed payment included, the IRS must first give you at least 30 days' notice with its reasons, unless it believes collection is in jeopardy. A later year's balance not paid on time counts as a default. A defaulted plan can be reinstated, sometimes for a fee.
Other options
An offer in compromise settles a balance for less than the full amount, generally when it is the most the IRS expects to collect within a reasonable time. For financial hardship, the IRS may mark an account currently not collectible; the debt stays, and penalties and interest continue.
Florida has no personal income tax, so for individuals these rules are federal only.
Payments under a plan use the same methods as any other federal payment, listed in How to pay federal taxes.
Sources
- IRC § 6159, agreements for payment of tax liability in installments
- Treas. Reg. § 300.1, installment agreement fee
- Treas. Reg. § 300.2, fee for restructuring or reinstating an installment agreement
- IRC § 6601, interest on underpayment, nonpayment, or extensions of time for payment of tax
- IRC § 6651, failure to file tax return or to pay tax
- IRC § 7122, compromises
- IRS, Payment plans; installment agreements
- IRS, Online payment agreement application
- IRS, About Form 9465, Installment Agreement Request
- IRS, Instructions for Form 9465
- IRS, Offer in compromise
- IRS, Temporarily delay the collection process
- Florida Constitution, art. VII, § 5 (no tax on the income of natural persons)
This article is general educational information, not tax, legal, or accounting advice, and does not create a client relationship. Tax law changes and depends on your specific facts. Information is current as of September 23, 2026 for tax year 2026; verify before acting. Consult a qualified CPA, EA, or attorney about your situation.
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