How to set up an IRS payment plan online
You can set up an IRS payment plan through the IRS Online Payment Agreement tool on IRS.gov without calling or visiting an office. The tool walks you through entering your tax information, choosing a payment amount, and selecting a due date each month. The whole process takes about 15 minutes if you have your tax notice and bank account details ready.
The IRS offers two types of plans you can set up online: a short-term extension (up to 180 days to pay in full) and a long-term installment agreement (monthly payments over several years). Which one you can use depends on how much you owe and how quickly you can pay.
Key Takeaways
- The IRS Online Payment Agreement tool at IRS.gov lets you set up a plan without calling, and you get confirmation immediately after completing it.
- You need your Social Security Number or Individual Taxpayer Identification Number, the tax year the debt is from, and your bank account or debit card information.
- Short-term extensions work for balances under $25,000 and give you up to 180 days to pay; long-term installment agreements work for larger amounts and spread payments over months or years.
- The IRS charges a setup fee (usually $31 to $225 depending on the plan type) and interest continues to accrue on the unpaid balance until you pay in full.
- Once your plan is approved, you can modify the payment amount or due date online, but you cannot change it during the first 120 days unless you have a hardship.
What you need before you start
Gather these items before opening the IRS Online Payment Agreement tool. You will need your Social Security Number or ITIN, the tax year the debt is from (for example, 2023 or 2024), and the tax notice the IRS sent you—specifically the notice number, which appears in the upper right corner of the letter.
Have your bank account information ready if you plan to pay by direct debit (checking or savings account). If you prefer to pay by debit or credit card, you will need that card number instead. The IRS does not charge a fee for direct debit payments, but credit and debit card payments include a processing fee added by the payment processor, usually 1.87% to 2.35% of the payment amount.
If you are setting up a plan for a joint return, you will need both spouses' Social Security Numbers. If you do not have your tax notice handy, you can still start the tool—it will ask you questions to verify your identity—but having the notice number speeds things up.
The step-by-step process on IRS.gov
Go to IRS.gov and search for "Online Payment Agreement" or navigate directly to the payment agreement tool. Click "Apply Now" and select whether you are an individual or a business (most people select individual). The tool will ask you to enter your Social Security Number, date of birth, and filing status, then verify your identity by answering security questions or using your IRS online account login if you have one.
Next, enter the tax year and notice number from your IRS letter. The tool will pull up your balance and show you how much you owe. Review the amount to make sure it matches your notice. Then choose your payment plan type: a short-term extension if you owe under $25,000 and can pay within 180 days, or a long-term installment agreement if you need more time or owe more.
For a short-term extension, you enter a single payment amount and a due date. For an installment agreement, you enter a monthly payment amount and select which day of the month you want to pay (the 1st through the 28th). The tool will show you how many months it will take to pay off the balance at that payment level. You can adjust the amount up or down to change the timeline.
Review the setup fee (the IRS will add it to your first payment or your balance), confirm your payment method, and submit. You will receive a confirmation number immediately and an email confirmation within a few minutes. Print or save the confirmation—you will need it if you contact the IRS later about this plan.
Setup fees and how interest works
The IRS charges a setup fee to create an installment agreement. The fee ranges from $31 to $225 depending on the plan type and how you pay. Short-term extensions cost $31 if you set them up online. Long-term installment agreements cost $31 if you pay by direct debit, or $225 if you pay by check, money order, credit card, or debit card. The setup fee is added to your balance or charged as your first payment.
Interest and penalties continue to accrue on the unpaid balance every day until you pay in full. The interest rate is set by the IRS quarterly and is currently around 8% per year, but it changes. Penalties also apply—typically 0.5% of the unpaid tax per month. This means the longer you take to pay, the more you owe in total. Making larger payments or paying more frequently reduces the total interest you will pay.
If you fall behind on a payment, the IRS will send you a notice. Missing a payment does not automatically cancel your plan, but if you miss three payments in a row, the IRS can terminate the agreement and demand full payment. If that happens, you can request a new plan or ask for a hardship review.
Modifying or canceling your plan after setup
Once your plan is active, you can change your monthly payment amount or due date through the IRS Online Payment Agreement tool. Log in with the same credentials you used to set up the plan, find your agreement, and select "Modify." You can increase or decrease your payment amount, or move your due date to a different day of the month.
The IRS does not allow you to modify your plan during the first 120 days unless you request a hardship modification. After 120 days, you can make changes as often as you need. If you want to pay off the plan early, you can do so at any time without penalty—just make a larger payment or pay the remaining balance in full.
If you need to cancel the plan entirely, you can do that online as well, but canceling means the full remaining balance becomes due. Only cancel if you have the money to pay in full or if you are setting up a different plan. If your financial situation changes and you cannot afford your current payment, contact the IRS at 1-800-829-1040 to discuss a hardship modification or a new plan with a lower payment.
What happens if the online tool will not accept you
The IRS Online Payment Agreement tool may reject you if your identity verification fails, if the IRS has a freeze on your account, or if you owe more than $50,000 (the online tool has a limit). If the tool will not let you proceed, you have two other options: call the IRS at 1-800-829-1040 to set up a plan by phone, or mail Form 9465 (Installment Agreement Request) to the IRS address on your tax notice.
Calling takes 20 to 45 minutes depending on hold times. Mailing Form 9465 takes longer—the IRS typically responds within 30 days—but you can include a request for a specific payment amount and due date. Both methods work, but the online tool is fastest if you can use it.
If your account is frozen, it usually means the IRS is investigating a discrepancy or you have a compliance issue (like unfiled returns). Contact the IRS before trying to set up a payment plan; they will tell you what needs to be resolved first.
Tracking your plan and making payments
Once your plan is active, you can view it anytime by logging into your IRS online account at IRS.gov or by calling 1-800-829-1040. Your account shows your remaining balance, your payment history, and your next due date. Set a calendar reminder a few days before each payment is due so you do not miss it.
If you set up direct debit, the IRS will withdraw your payment automatically on the due date you selected. If you chose to pay by check or money order, you must send the payment yourself by the due date. If you chose credit or debit card, you can pay through the IRS payment processor each month, or you can set up automatic payments through your card issuer.
Keep records of every payment you make. The IRS tracks payments, but if there is ever a dispute about whether a payment was received, your bank or card statement is your proof. If a payment fails or is rejected, the IRS will send you a notice; contact them immediately to resubmit the payment and avoid default.
Frequently Asked Questions
Can I set up a payment plan if I owe back taxes from multiple years?
Yes. The online tool can combine multiple tax years into one plan. When you enter your tax year and notice number, the IRS will show your total balance across all years you owe. You set up one plan and one monthly payment that covers all of them.
What if I cannot afford the minimum payment the IRS suggests?
The IRS does not set a minimum payment amount—you choose what you can afford. However, if your payment is very small, it will take many years to pay off and you will owe much more in interest. If you truly cannot afford any payment, contact the IRS at 1-800-829-1040 to discuss a hardship status or an offer in compromise, which may reduce what you owe.
Do I have to pay the setup fee upfront?
No. The IRS adds the setup fee to your balance or charges it as part of your first payment. You do not pay it separately. If you pay by direct debit, the fee is typically $31; if you pay by other methods, it can be up to $225.
Can I set up a payment plan if I have not filed my tax return yet?
No. You must file your return first. The IRS needs to assess the tax before you can set up a plan to pay it. If you have not filed, contact a tax professional or the IRS to file your return, then set up the payment plan.
What happens to my payment plan if I get a refund next year?
The IRS will automatically apply your refund to your payment plan balance. Your refund does not go to your bank account; instead, it reduces what you owe. If this happens, your monthly payment amount stays the same unless you modify it, so you will pay off the plan faster.