You can set up an IRS payment plan through the IRS website without calling or visiting an office

The IRS offers two online tools to arrange a payment plan: the Online Payment Agreement tool for most taxpayers, and the Short-Term Extension for those who need just a few extra months. Both let you choose payment amounts and dates without speaking to anyone. You do not need to be a business owner or have a specific income level — if you owe federal income tax and cannot pay in full by the important date, you can use these tools.

The process takes about 15 minutes. You will need your Social Security number or Individual Taxpayer Identification Number, your filing status, and the tax year you owe for. The IRS will tell you when ready whether your request was accepted, and you can start making payments right away.

Key Takeaways

  • The Online Payment Agreement tool on IRS.gov lets you set up a monthly payment plan without calling, and you choose the payment amount and due date each month.
  • A Short-Term Extension gives you up to 180 days to pay in full without a monthly commitment, and has no setup fee.
  • Long-term payment plans (more than 180 days) charge a setup fee that ranges from $31 to $225 depending on how you pay and your income level.
  • You can change your payment amount or due date online at any time, and the IRS will send you a confirmation notice by mail within two weeks.
  • If you miss a payment, the plan can be terminated, but you can request reinstatement online or by phone.

The difference between a Short-Term Extension and a Long-Term Payment Plan

A Short-Term Extension is the simpler route if you need a few months to pay. You get up to 180 days from the original due date to pay the full amount you owe, with no monthly payments required. There is no setup fee. You request it online, and the IRS stops collection action while the extension is active. This works best if you know you will have the money within six months — a tax refund coming, a bonus, or a sale of property.

A Long-Term Payment Plan (also called an installment agreement) is for amounts you cannot pay off within 180 days. You commit to a monthly payment amount, and the plan runs until the debt is paid. The IRS charges a setup fee: $31 if you pay by direct debit from your bank account, $225 if you pay by check or money order, or $225 if you pay by credit or debit card. Low-income taxpayers (those with income below 250% of the federal poverty line for their family size) pay $31 regardless of payment method.

Most people choose the long-term plan because the monthly payment is smaller and more predictable. The short-term extension is best when you are close to having the full amount.

How to set up a payment plan on IRS.gov

Go to IRS.gov and search for "Online Payment Agreement" or navigate to the payment section. You will land on a page that asks whether you have received a notice from the IRS. If you have, enter the notice number. If you have not, you can still proceed — the IRS will look up your account using your Social Security number and filing status.

The tool will show you the total amount owed, broken down by tax year and type of tax. Review this carefully; if the amount is wrong, stop and call the IRS at 1-800-829-1040 to verify before setting up a plan. Once you confirm the amount, you choose between a short-term extension (if available for your situation) or a long-term plan.

For a long-term plan, you enter your desired monthly payment amount. The IRS will tell you the earliest date you can finish paying and the total interest and penalties that will accrue. You then choose your payment due date each month — the 1st through the 28th — and your payment method. Direct debit (automatic withdrawal from your bank account) is the cheapest option and the most reliable way to avoid missed payments.

After you submit, the IRS displays a confirmation number on screen. Write it down. You will receive an official notice in the mail within two weeks that details your plan, your monthly payment, and your rights.

Payment methods and how they affect your setup fee

Direct debit is the IRS's preferred method and carries the lowest setup fee: $31 for most taxpayers, $31 for low-income taxpayers. You authorize the IRS to withdraw money from your checking or savings account on your chosen due date each month. This is automatic and reliable — you do not have to remember to pay. If you set this up online, the fee is $31.

Credit or debit card payments cost $225 in setup fees (or $31 if you are low-income). You can pay online through the IRS website or through a third-party payment processor. The processor charges a separate convenience fee on top of the IRS setup fee — this fee varies by processor and is shown before you confirm. This method is useful if you want to earn credit card rewards, but the total cost is higher.

Check or money order payments also cost $225 in setup fees ($31 if low-income). You mail the payment to the address shown in your notice. This is the slowest method because the IRS must receive and process the check, which can take weeks. If you use this method, mail your payment early to avoid late fees.

The setup fee is added to your total debt and included in your monthly payment calculation. It does not come out of your first payment separately.

What happens after you set up your plan online

Your payment plan becomes active as soon as the IRS processes it, usually within one business day. If you set up direct debit, your first payment will be withdrawn on the due date you chose. The IRS stops sending collection notices and does not pursue wage garnishment or bank levies while you are in compliance with the plan.

You will receive an official notice by mail that includes your plan number, your monthly payment amount, your due date, and the expected payoff date. Keep this notice. You will need the plan number if you ever need to contact the IRS about your plan.

You can view your plan status and payment history anytime by logging into your IRS account on IRS.gov. This shows how much you have paid, how much remains, and your next due date. If your situation changes — you lose income or get a raise — you can request a modification online.

Changing your payment amount or due date

You can modify your payment plan online without calling the IRS. Log into your IRS account, find your payment plan, and select the option to modify. You can change your monthly payment amount or your due date (the day of the month your payment is due). The new amount takes effect on your next scheduled payment.

If you want to pay more than your monthly amount, you can do so at any time without penalty. Extra payments reduce your balance faster and lower the total interest you pay. If you want to pay less, the IRS will recalculate your plan to extend the payoff date, which increases the total interest owed.

If you cannot make a payment, contact the IRS before the due date. Missing a payment can terminate your plan, but you can request reinstatement online or by phone. Reinstatement is usually granted once, but repeated missed payments may result in collection action.

Fees, interest, and how long your plan will last

The setup fee is one-time and ranges from $31 to $225 depending on your payment method and income. This fee is added to your debt and spread across your monthly payments.

Interest accrues daily on your unpaid balance. The IRS charges the federal short-term rate plus 3 percent, which changes quarterly. As of early 2024, this rate is around 8 percent annually, but it varies. Interest is calculated on the remaining balance each month, so paying more than your minimum amount reduces interest faster.

Penalties also explore. If you did not file your tax return on time, you owe a failure-to-file penalty (usually 5 percent of the unpaid tax per month, up to 25 percent). If you filed but did not pay, you owe a failure-to-pay penalty (0.5 percent per month, up to 25 percent). These penalties stop accruing once you enter a payment plan, but they are part of your total debt.

The length of your plan depends on your monthly payment. If you pay $25 per month, your plan might last several years. If you pay $500 per month, it might be paid off in a year. The IRS will show you the payoff date when you set up your plan.

What to do if you cannot pay the monthly amount or miss a payment

If your circumstances change and you cannot afford your monthly payment, contact the IRS before the due date. You can request a modification to lower your payment amount, which extends your payoff date. You can also request a temporary pause (called a hardship deferment) if you are facing a temporary crisis, though this is rare and requires documentation.

If you miss a payment, the IRS will send you a notice. You have a grace period (usually 30 days) to make the payment before the plan is terminated. If the plan is terminated, collection action resumes — the IRS can garnish your wages, levy your bank account, or place a lien on your property.

If your plan is terminated, you can request reinstatement online or by calling 1-800-829-1040. Reinstatement is usually granted once without penalty. If you request reinstatement a second time, the IRS may require you to speak with a representative and may impose stricter terms.

Frequently Asked Questions

Can I set up a payment plan if I have not filed my tax return yet?

No. You must file your return first, even if you cannot pay. File electronically or by mail, and then set up the payment plan. If you file late, you will owe a failure-to-file penalty on top of the tax, but the payment plan covers the full amount including penalties.

What if I owe taxes for multiple years?

The Online Payment Agreement tool combines all your tax debts into one plan. Your monthly payment covers all years at once. You cannot split the debt into separate plans for each year.

Will a payment plan hurt my credit score?

A payment plan itself does not appear on your credit report. However, if the IRS filed a tax lien before you set up the plan, the lien remains on your credit report for ten years from the date it was filed, even after you pay off the debt. Setting up a plan does not remove a lien, but paying off the debt in full does — the IRS will release the lien within 30 days of full payment.

Can I pay off my plan early without penalty?

Yes. You can pay the full remaining balance at any time without penalty. Paying early saves you interest. There is no prepayment fee or early termination fee.

What if the IRS says I do not owe what I think I owe?

Before you set up a plan, verify the amount on your IRS notice or in your IRS account. If the amount is wrong, call 1-800-829-1040 to dispute it before setting up a plan. Setting up a plan does not prevent you from disputing the amount, but it is easier to resolve the dispute first.