How to set up a payment plan with the IRS
You can set up a payment plan with the IRS through three main routes: online through the IRS website, by phone, or by mail. The online route is fastest — you can complete it in minutes if you have your Social Security number, the tax year you owe for, and a bank account or credit card. The IRS calls this an installment agreement, and it lets you pay what you owe in monthly chunks instead of a lump sum.
The IRS charges a setup fee (usually $31 to $225 depending on the method you choose) and interest on the unpaid balance. You'll owe interest from the original due date until you pay in full, so the longer your plan runs, the more interest you pay. But a payment plan stops the IRS from taking your paycheck, bank account, or tax refund while you're making regular payments — as long as you stick to the agreement.
If you owe less than $50,000 in total tax, penalties, and interest, you can use the Online Payment Agreement tool on IRS.gov. If you owe more, you'll need to call or mail in Form 433-D. Either way, you need to have filed your tax return already — you can't set up a plan for a return you haven't filed yet.
Key Takeaways
- The IRS Online Payment Agreement tool at IRS.gov is the fastest way to set up a plan if you owe under $50,000 and takes about 10 minutes.
- You'll pay a setup fee ($31 to $225) plus interest on the unpaid balance from the original due date until you pay in full.
- A payment plan stops the IRS from garnishing your wages or seizing your bank account, but only if you make each payment on time.
- If you owe more than $50,000 or want to pay over a longer period, you must call 1-800-829-1040 or mail Form 433-D with financial information.
- The IRS can end your plan if you miss a payment or file late in a future year, so set up automatic payments if possible.
Setting up a plan online through IRS.gov
Go to IRS.gov and search for "Online Payment Agreement" or navigate directly to the tool. You'll need your Social Security number or Individual Taxpayer Identification Number, the tax year you owe for, and your filing status from that year. Have a bank account or credit card ready — the IRS will ask how you want to pay each month.
The tool will show you how much you owe and let you choose your monthly payment amount and due date. Pick a date that lines up with when you get paid so you're less likely to miss a payment. The IRS will calculate how many months your plan will run based on the amount you choose to pay each month. Once you confirm, you'll get a confirmation number immediately — that's your proof the plan is in place.
The setup fee for online agreements is $31 if you set up automatic payments from a bank account, or $225 if you pay by credit or debit card. The IRS deducts the fee from your first payment or charges it separately depending on the method you choose. You'll see the exact fee before you confirm the agreement.
Calling the IRS to set up a payment plan
Call the IRS at 1-800-829-1040 during business hours (Monday through Friday, 7 a.m. to 7 p.m. your local time). Have your Social Security number, the tax year you owe for, and information about your income and expenses ready. The IRS representative will ask about your financial situation to make sure a payment plan is the right option and to determine what monthly payment you can afford.
The setup fee for a phone agreement is $225. The IRS will mail you a confirmation letter within two weeks showing your monthly payment amount, due date, and the total number of months your plan will run. Don't assume the plan is active until you receive that letter — if you miss a payment before it arrives, the IRS may start collection action.
Wait times to reach the IRS by phone can be long, especially during tax season (January through April). Call early in the morning or late in the week if you can. If you can't reach anyone after waiting, you can request a callback instead of staying on hold.
Mailing in Form 433-D for longer or larger payment plans
If you owe more than $50,000 or want to pay over more than 72 months, you must use Form 433-D (Installment Agreement Request). Download it from IRS.gov, fill it out with your personal information and the monthly payment you're proposing, and mail it to the IRS address listed on the form (it varies by state). Include a copy of your most recent tax return and recent pay stubs or proof of income.
The IRS will review your financial information and either approve your proposed payment amount or counter with a different one. This process takes 30 to 60 days. You'll receive a letter confirming the agreement or asking for more information. Don't make payments until you receive written confirmation — if you send money without an approved plan in place, the IRS may apply it to your account but won't consider you protected under an agreement.
The setup fee for a mailed agreement is $225. If the IRS approves a payment plan based on your financial hardship, they may reduce or waive the fee, but you have to ask for that consideration in writing when you submit the form.
What happens after your payment plan is approved
Once your plan is active, make your payment on or before the due date each month. You can pay online through IRS.gov, by phone, by mail, or through automatic bank withdrawal. Automatic withdrawal (also called direct debit) is the safest option because you won't forget, and it lowers your setup fee to $31 instead of $225 if you're setting up a new plan.
The IRS will continue to charge interest and penalties on your unpaid balance each month. You can see your current balance and payment history anytime by logging into your IRS account at IRS.gov or by calling 1-800-829-1040. If you get a tax refund in a future year while your plan is active, the IRS will apply that refund to your debt instead of sending it to you.
If your financial situation improves, you can pay off the plan early without penalty. Contact the IRS to find out your payoff amount, which includes all remaining interest and penalties. There's no fee to pay early.
What breaks a payment plan and what to do if it happens
Your payment plan ends if you miss a payment by more than 30 days. The IRS will send you a notice saying the plan is terminated and that collection action will resume — meaning they can garnish your wages, seize your bank account, or place a lien on your property. If you miss a payment, contact the IRS immediately at 1-800-829-1040 to explain and ask to reinstate the plan. If you can pay the missed amount plus any current payment due, the IRS will usually put the plan back in place.
Your plan also ends if you don't file a tax return or pay taxes on time in a future year. For example, if you set up a plan in 2024 for 2023 taxes and then file your 2024 return late or owe taxes you don't pay, the IRS can terminate the 2023 plan. File on time and pay any new taxes to keep your existing plan active.
If your plan is terminated and you can't reinstate it, you can request a new one, but the IRS may require you to provide financial information again. If you're having trouble making payments, contact the IRS before you miss one — they can sometimes modify your plan to lower your monthly payment if your income has dropped.
Comparing payment plan options by setup method
| Method | Amount Owed Limit | Setup Fee | Time to Approval | Best For |
|---|---|---|---|---|
| Online Payment Agreement | Under $50,000 | $31 (bank account) or $225 (card) | Immediate | Smaller debts, quick setup |
| Phone (1-800-829-1040) | Any amount | $225 | 2 weeks for confirmation letter | Questions about affordability, need guidance |
| Form 433-D by Mail | Any amount | $225 (may be reduced for hardship) | 30 to 60 days | Larger debts, longer payment periods, financial hardship |
Frequently Asked Questions
Can I set up a payment plan if I haven't filed my tax return yet?
No. You must file your return first so the IRS knows exactly what you owe. If you haven't filed, file as soon as you can. Once the return is processed, you can set up a payment plan. If you're waiting for documents or can't file by the deadline, file an extension (Form 4868) to avoid additional penalties.
What if I can't afford the monthly payment the IRS is asking for?
Call the IRS at 1-800-829-1040 and explain your situation. They can lower your monthly payment, which will extend how long your plan runs and increase the total interest you pay. If you're in severe financial hardship, you can request Currently Not Collectible status, which pauses collection action temporarily while you get back on your feet.
Will setting up a payment plan hurt my credit score?
A payment plan itself does not appear on your credit report. However, if the IRS places a tax lien on your property (which can happen if you don't pay or break your plan), that lien will show up on your credit report and harm your score. Staying current on your payment plan prevents a lien from being filed.
Can I change my payment plan after it's approved?
Yes. If your income changes or you want to pay faster, contact the IRS at 1-800-829-1040 to modify your plan. You can increase your monthly payment anytime without penalty. Decreasing your payment is possible but requires the IRS to review your finances again, and they may deny the request if your situation hasn't changed significantly.
What if I get a tax refund while my payment plan is active?
The IRS will automatically apply your refund to your payment plan debt instead of sending it to you. This reduces what you owe and can shorten your plan. If you want to protect a refund for a specific reason (like a recent hardship), contact the IRS before filing to discuss your options, though they rarely allow this.