You can set up an IRS payment plan online, by phone, or by mail — the fastest route is the IRS website if you have your tax ID and the amount you owe

The IRS offers three main ways to arrange a payment plan: the Online Payment Agreement tool on IRS.gov (takes 10 to 15 minutes and gives you a decision the same day), a phone call to the IRS at 1-800-829-1040 (wait times vary but you get immediate help), or a paper Form 9465 mailed to the address on your tax notice. Online is fastest if you owe $50,000 or less in combined taxes, penalties, and interest. If you owe more, you must use the phone or mail route, and you may need to provide financial information to show you cannot pay in full.

Before you start, gather your Social Security number or ITIN, your tax ID, the tax year(s) you owe for, and the exact amount owed — this is on your IRS notice. Have a checking or savings account number ready if you plan to pay by automatic withdrawal, which lowers your setup fee. The IRS charges a fee to set up the plan, ranging from $31 to $225 depending on the method you choose and your income level.

Key Takeaways

  • The IRS Online Payment Agreement tool at IRS.gov is the fastest method for debts under $50,000 and gives you a decision within minutes.
  • Automatic withdrawal from your bank account reduces your setup fee by $31 to $225, depending on the payment plan type.
  • Short-term payment plans (120 days or fewer) have lower or no setup fees, while long-term installment agreements cost more but spread payments over years.
  • You can modify or cancel your plan at any time, and the IRS will send you a notice confirming the terms and your first payment due date.
  • If you miss a payment, the IRS will contact you — staying in touch and making up the missed amount keeps the plan active.

Setting up a plan online through IRS.gov

Go to IRS.gov and search for "Online Payment Agreement." You will land on a page with a button to start the tool. You do not need to log into an IRS account, but you will need to verify your identity by answering security questions based on your tax history. The tool will ask for your Social Security number, date of birth, address, and the tax year(s) you owe for.

Once verified, the tool shows you the total amount owed and offers two options: a short-term plan (pay within 120 days) or a long-term installment agreement (pay over months or years). For short-term plans, you can often set this up with no fee if you pay within 120 days. For long-term plans, you choose your monthly payment amount — the IRS calculates how many months you need based on what you enter. The tool then asks whether you want to pay by automatic withdrawal (which reduces the fee) or by check, credit card, or debit card each month.

At the end, you will see your setup fee, first payment amount, and due date. If you agree, the tool generates a confirmation number and sends one to your email. Your payment plan is active immediately, though the IRS mails a formal notice within two weeks. You can start making payments right away using the confirmation number.

Calling the IRS to arrange a payment plan by phone

Call 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(s) you owe for, and your IRS notice in front of you. Wait times are longest in the morning and during tax season (January through April), so calling in the afternoon or after April often means shorter holds.

When you reach a representative, tell them you want to set up a payment plan. They will verify your identity, confirm the amount owed, and walk you through the same options as the online tool: short-term (120 days or less) or long-term installment agreement. They will ask what monthly payment you can afford and calculate how long the plan will run. They will also ask whether you want automatic withdrawal, which lowers your fee.

The representative will give you a confirmation number, your setup fee, and your first payment due date before you hang up. The IRS mails a formal notice within two weeks. This method works well if you have questions or if your situation is complicated — for example, if you owe for multiple years or if you have already defaulted on a previous plan.

Mailing Form 9465 if you owe more than $50,000

If you owe more than $50,000 in combined taxes, penalties, and interest, you cannot use the online tool. Instead, download Form 9465 (Installment Agreement Request) from IRS.gov, fill it out, and mail it to the address shown on your tax notice. The form asks for your name, Social Security number, the tax year(s), the total amount owed, and the monthly payment you propose.

You also need to include a financial statement showing your income, expenses, and assets — this helps the IRS decide whether your proposed payment is reasonable. The IRS calls this a Collection Information Statement, and you can use Form 433-F (short form) or Form 433-A (detailed form). The short form is usually enough unless the IRS asks for more detail.

Mail the form and financial statement to the address on your notice. Processing takes 30 to 45 days. The IRS will review your proposal and either approve it, deny it, or counter with a different monthly payment. They will send you a letter with their decision. If approved, you will receive a formal notice with your plan terms and first payment due date.

Understanding setup fees and payment options

The IRS charges a fee to set up your plan, and the amount depends on how you set it up and whether you choose automatic withdrawal. If you set up online or by phone with automatic withdrawal, the fee is $31. If you set up online or by phone without automatic withdrawal (paying by check or card), the fee is $225. If you mail Form 9465, the fee is $31 if you later switch to automatic withdrawal, or $225 if you pay by other methods.

Low-income taxpayers (those whose income is at or below 250% of the federal poverty line for their family size) pay a reduced fee of $31 for any setup method. You can request a fee reduction or waiver if you are in financial hardship — call the IRS or include a written request with your Form 9465.

Once your plan is active, you pay your monthly amount by automatic withdrawal, check, credit card, debit card, or electronic federal tax payment system (EFTPS). Automatic withdrawal is the most reliable because the IRS pulls the money on a date you choose each month, and you do not have to remember to send a payment. If you pay by check or card, send your payment to the address on your notice at least 10 days before the due date.

What happens after your plan is approved

The IRS sends you a formal notice within two weeks of approval. This notice shows your plan terms: the monthly payment amount, the due date each month, the total number of payments, and the date your plan will end. Keep this notice — you will need it if you have questions or if you want to modify the plan later.

Your first payment is usually due 30 days after the plan is approved. If you set up online or by phone, you can often make your first payment immediately using the confirmation number, even before the formal notice arrives. If you set up by mail, wait for the formal notice to arrive before making your first payment, unless the IRS tells you otherwise in a letter.

Interest and penalties continue to accrue on your unpaid balance while you are on the plan. This means your total debt grows slightly each month, even as you make payments. The IRS applies each payment first to penalties and interest, then to the tax itself. You can pay more than your monthly amount at any time without penalty — extra payments go directly to reducing your balance and can shorten your plan.

Modifying or canceling your payment plan

If your financial situation changes and you can no longer afford your monthly payment, you can request a modification. Call the IRS at 1-800-829-1040 or log into your IRS account online to change your payment amount. The IRS will recalculate how many months you need and send you an updated notice. There is no fee to modify an existing plan.

If you want to cancel your plan because you can now pay the balance in full, call the IRS or send a written request to the address on your notice. Once canceled, any remaining balance becomes due immediately. If you received a refund after setting up the plan, the IRS may apply it to your debt automatically.

If you come into money — a bonus, inheritance, or tax refund — you can pay down your plan balance without affecting the monthly payment. This shortens how long you will be on the plan. The IRS will not automatically lower your monthly payment just because you paid extra, but you can call and request a modification if you want to reduce the monthly amount.

What to do if you miss a payment

If you miss a monthly payment, the IRS will send you a notice. You have 30 days to make up the missed payment. If you do, your plan stays active and you continue with your regular monthly payments. If you do not make up the missed payment within 30 days, the IRS can terminate your plan, and the full remaining balance becomes due immediately.

If you know you will miss a payment, call the IRS before the due date. They may be able to give you a short extension or adjust your plan. If you miss a payment by accident, make it as soon as you notice and contact the IRS to confirm the plan is still active. Staying in touch is important — the IRS is more willing to work with you if you communicate than if you simply stop paying.

If your plan is terminated, you can request a new one, but the IRS may require you to provide updated financial information and may offer less favorable terms. Avoiding termination is much easier than getting back into a plan after default.

Frequently Asked Questions

Can I set up a payment plan if I owe state taxes too?

No, this process covers only federal IRS taxes. Each state has its own payment plan process. Contact your state tax agency directly to set up a plan for state taxes. Some states offer similar online tools; others require a phone call or mailed form.

What if I cannot afford the monthly payment the IRS suggests?

You can propose a lower payment when you set up your plan. The IRS will calculate how many months you need based on what you can afford. If your proposed payment is very low, the IRS may ask for financial information to verify you cannot pay more. Be honest about what you can afford — a plan you can actually stick to is better than one you will default on.

Will setting up a payment plan hurt my credit score?

The IRS does not report payment plans to credit bureaus, so setting up a plan itself does not affect your credit. However, if the IRS files a tax lien (a legal claim against your property), that lien may appear on your credit report and harm your score. Setting up a payment plan can help you avoid a lien by showing the IRS you are taking action to pay.

Can I pay off my plan early without penalty?

Yes. You can pay more than your monthly amount at any time, and you can pay off the entire balance whenever you want. There is no penalty for paying early. Extra payments go directly to your balance and reduce the total interest and penalties you will owe.

What if I get a tax refund while I am on a payment plan?

The IRS will automatically apply your refund to your remaining balance. This reduces what you owe, though your monthly payment amount does not change unless you request a modification. If you want to lower your monthly payment after receiving a refund, call the IRS and ask them to recalculate your plan.