You can set up a payment plan with the IRS through their Online Payment Agreement tool without calling or mailing forms
The IRS lets you create a payment plan directly on their website using the Online Payment Agreement tool. You log in, enter what you owe, choose how much to pay each month, and the plan goes into effect immediately. No phone calls, no paper forms mailed back and forth. The whole process takes about 15 minutes if you have your tax return and bank account information ready.
This works only if you owe $50,000 or less in combined taxes, penalties, and interest. If you owe more, you will need to use a different method — either the IRS phone line or Form 9465 mailed to the address on your notice.
Key Takeaways
- The Online Payment Agreement tool at IRS.gov lets you set up a monthly plan without calling or mailing anything.
- You must have an IRS online account (created free at IRS.gov) and know your adjusted gross income from your most recent tax return.
- The plan starts right away, and the IRS charges a one-time setup fee ($31 to $225 depending on your payment method) that gets added to what you owe.
- Monthly payments can be as low as $25, but the longer your plan runs, the more interest and penalties you will pay overall.
- If you miss a payment, the plan can be cancelled and the full balance becomes due immediately.
What you need before you start
Have your most recent tax return handy — you will need your adjusted gross income (AGI) from it to log into your IRS account or to verify your identity. If you do not have the return in front of you, you can look it up through your tax software or your tax preparer.
You also need a bank account for automatic payments. The IRS strongly prefers automatic withdrawal from checking or savings — it is the cheapest setup option and the most reliable way to keep your plan active. If you want to pay by credit or debit card instead, the fees are higher and you will need to set that up separately through a payment processor.
Have your notice from the IRS in front of you. It shows the balance due and the date by which you need to respond. You do not have to wait until that date to set up a plan — in fact, setting one up early shows the IRS you are taking action.
Step-by-step: creating your plan online
Step 1: Create or log into your IRS online account. Go to IRS.gov and look for "Online Services" or search for "IRS online account." You will create a free account using your Social Security number, date of birth, and address. If you already have an account, just log in. The IRS will ask you to verify your identity — this usually means answering questions about your tax history or receiving a code by text or email.
Step 2: Go to the Online Payment Agreement tool. Once logged in, search for "Online Payment Agreement" on IRS.gov or look under the "Payments" section. The tool will show you the total amount you owe, including any penalties and interest that have built up since the IRS sent your notice.
Step 3: Choose your payment amount and frequency. The tool will suggest a monthly payment based on how long you want the plan to run. You can accept that suggestion or change it. The minimum is usually $25 per month, but the IRS may require a higher amount depending on your balance. Remember: the longer your plan runs, the more interest you pay, so paying more per month saves you money overall.
Step 4: Select your payment method. Choose automatic bank withdrawal (the cheapest option, with a $31 setup fee) or credit/debit card (higher fees, usually $225). Automatic withdrawal is the safest choice because you cannot accidentally miss a payment.
Step 5: Review and confirm. The tool shows you the total setup fee, your first payment date, and when your plan will be paid off. Read this carefully — once you confirm, the plan is active and your first payment will be withdrawn on the date shown.
What happens after you set up your plan
Your payment plan begins immediately. If you chose automatic withdrawal, your first payment will come out of your bank account on the date the tool showed you. You will receive a confirmation number and a copy of your payment agreement — save both of these.
The IRS will send you a formal notice in the mail within a few weeks confirming the plan. This is not a request for more information; it is just paperwork showing the terms. Keep it with your tax records.
Interest and penalties continue to build on the unpaid balance each month, even though you are making payments. This is normal and unavoidable — the IRS charges interest on any tax you owe, whether you are on a plan or not. Your monthly payment covers part of the principal and part of the new interest that accrues.
Setup fees and what they cost
The IRS charges a one-time setup fee when you create your plan online. The fee depends on how you pay:
| Payment Method | Setup Fee |
|---|---|
| Automatic bank withdrawal | $31 |
| Credit or debit card (through a payment processor) | $225 |
The fee gets added to your balance, so you will pay it off as part of your monthly payments. If you later switch from card payments to automatic withdrawal, you may be able to lower your fee, but you will need to contact the IRS to make that change.
If you cannot pay the full amount the tool suggests
The Online Payment Agreement tool has limits on how low your payment can go. If the minimum monthly payment is still too high, you have other options. You can request a Currently Not Collectible status, which temporarily pauses collection while you deal with financial hardship. You can also call the IRS at 1-800-829-1040 to discuss a lower payment or a different arrangement.
Do not ignore the notice or skip payments on a plan you set up. If you miss a payment, the IRS can cancel your plan and demand the full balance immediately. If you know a payment will be late, contact the IRS before the due date to ask about a short delay.
When the online tool will not work for you
The Online Payment Agreement tool only works if you owe $50,000 or less. If your balance is higher, you will need to use Form 9465 (Installment Agreement Request), which you mail to the IRS address shown on your notice. The process takes longer — usually 30 to 60 days — but the setup fee is the same.
You also cannot use the online tool if you have not filed all required tax returns for the past six years. The IRS will ask about this when you log in, and if you have unfiled returns, you will need to file them first or work with the IRS by phone.
If you are self-employed or own a business, the online tool may have additional restrictions. Call 1-800-829-1040 to confirm whether you can use it for your situation.
Frequently Asked Questions
How long does it take for the plan to start after I set it up online?
Your plan is active immediately after you confirm it. Your first payment will be withdrawn on the date the tool showed you, usually 10 to 14 days after you set it up. The formal notice from the IRS arrives by mail a few weeks later.
Can I change my payment amount after the plan starts?
Yes. Log back into your IRS account and go to the Online Payment Agreement tool. You can increase or decrease your monthly payment, though the IRS may not allow you to go below $25 per month or below what they consider reasonable for your balance.
What if I want to pay off the plan early?
You can pay more than your monthly amount at any time without penalty. Make extra payments through your IRS account or by mailing a check to the address on your payment agreement notice. The extra money goes straight to your principal balance, which reduces the total interest you pay.
Do I need a tax preparer or lawyer to set up an online payment plan?
No. The online tool is designed for individuals to use on their own. If your situation is complicated — for example, if you owe multiple years of taxes or have other IRS issues — you may want to talk to a tax professional, but it is not required to set up a basic payment plan.
What happens if I miss a payment?
The IRS will send you a notice. If you miss a payment by more than a few days, your plan can be cancelled and the full remaining balance becomes due. Contact the IRS immediately if you know you will miss a payment — they may give you a short extension or let you catch up over the next few months.