You can set up a payment plan with the IRS through their online portal without calling or visiting an office

The IRS offers two main online routes: the Online Payment Agreement tool on IRS.gov, which takes about 15 minutes and works for most people, and the IRS Direct Pay system, which is simpler but only lets you schedule a single payment rather than a full plan. The Online Payment Agreement tool is the one you want if you owe more than you can pay in one lump sum. You will need your Social Security number, date of birth, filing status, and the tax year in question. The system will tell you when ready whether you may have access to and what your monthly payment would be.

The process is faster than calling the IRS — you get a confirmation number the same day — and you avoid the current phone wait times, which often run 30 minutes or longer. The downside is that the online tool only works for certain situations. If you owe more than $50,000, if you have unfiled tax returns, or if you are a business owner with payroll taxes owed, you will need to use a different method.

Key Takeaways

  • The Online Payment Agreement tool on IRS.gov lets you set up a monthly payment plan in 15 minutes without calling, and you get a confirmation number when ready.
  • You will need your Social Security number, filing status, tax year, and the exact amount you owe before you start.
  • The online tool works only if you owe $50,000 or less in combined tax, penalties, and interest for a single tax year.
  • Monthly payments through a payment plan include a setup fee (currently $31 to $225 depending on your payment method) and interest that continues to accrue until the balance is zero.
  • If the online tool rejects you, you can request a payment plan by mail using Form 9465, though this takes 30 to 60 days for approval.

What you need before you log in

Gather these items before you open the Online Payment Agreement tool. You will need your Social Security number, date of birth, and filing status (single, married filing jointly, etc.). You also need the tax year for which you owe money — for example, 2023 or 2024 — and the exact amount you owe. You can find this on your most recent IRS notice, usually a CP14 or CP501 letter, or by logging into your IRS account at IRS.gov under "Account" and "Tax Records."

If you do not have a recent notice and cannot access your IRS account, call the IRS at 800-829-1040 and ask for the balance on your account. Write down the total amount owed, which includes the original tax, penalties, and interest. The online tool will calculate what your monthly payment needs to be based on how long you want the plan to last — typically 24 to 72 months depending on the amount.

Step-by-step: using the Online Payment Agreement tool

Go to IRS.gov and search for "Online Payment Agreement" or navigate directly to the payment agreement section under "Payments." You will see a button for "Set Up a Payment Plan." Click it and you will be asked to verify your identity. The IRS uses a few methods: you can enter your Social Security number and date of birth, or if you have an IRS online account, you can log in with those credentials.

Once verified, the tool will ask you to enter the tax year you owe for and confirm the amount. It will then show you payment options — usually ranging from 24 months to 72 months — with the monthly payment amount for each. Choose the plan that fits your budget. The tool will calculate the total interest you will pay over the life of the plan so you can see the full cost.

Next, you will enter your bank account information for automatic withdrawal (called Direct Debit), or you can choose to pay by credit or debit card, though card payments carry a processing fee on top of the setup fee. Direct Debit is cheaper — the setup fee is currently $31 if you choose this method, compared to $225 for a card payment. Select your payment date (usually the 15th or the last day of the month), review the agreement terms, and submit.

You will receive a confirmation number on screen when ready. Write it down or take a screenshot. The IRS will also send you a letter in the mail within two weeks confirming the plan details and your first payment date. Your first payment will be withdrawn on the date you selected.

When the online tool will not work for you

The Online Payment Agreement tool has limits. It will reject you if you owe more than $50,000 in total tax, penalties, and interest. It will also reject you if you have unfiled tax returns for any year — you must file those returns first, even if you cannot pay what you owe on them. If you are self-employed or own a business with payroll taxes owed, the online tool does not handle those; you will need to contact the IRS directly.

If you are currently in an IRS collection action — for example, if the IRS has already garnished your wages or levied your bank account — the online tool may not be available. In these cases, the IRS usually requires you to work with a revenue officer or call the IRS to negotiate the plan terms.

If the online tool rejects you, your next step is to request a payment plan by mail using Form 9465 (Installment Agreement Request). Mail the form to the IRS address shown in your most recent notice. Processing takes 30 to 60 days. You can also call 800-829-1040 to request a plan over the phone, though wait times are typically 45 minutes to over an hour.

What happens after you set up the plan

Your first payment will be withdrawn on the date you selected. Every month after that, the IRS will withdraw the same amount on the same date. Interest continues to accrue on the unpaid balance at the current IRS rate, which changes quarterly. As of 2024, the rate is 8 percent per year, but this varies. Each month, part of your payment goes toward interest and part toward the principal balance.

You will receive a statement in the mail each year showing how much you paid, how much interest accrued, and your remaining balance. You can also check your balance anytime by logging into your IRS account online. If you miss a payment, the IRS will send you a notice. If you miss three payments in a row, the agreement can be terminated and the IRS may pursue other collection actions.

If your financial situation improves and you want to pay off the plan early, you can do so without penalty. Contact the IRS or log into your account to request a payoff amount, which will include any accrued interest through the date you plan to pay.

Setup fees and what they cover

The setup fee is a one-time charge added to your first payment. If you choose Direct Debit (automatic withdrawal from your bank account), the fee is currently $31. If you pay by credit or debit card, the fee is $225. Some people may have access to for a reduced fee of $31 even with a card payment if their income is below a certain threshold — the IRS calls this the "low-income" rate. You can ask about this when you set up the plan.

The setup fee covers the cost of creating and maintaining your agreement. It is separate from interest, which continues to accrue on your unpaid balance. If you set up a plan for $5,000 over 36 months, for example, you will pay the $31 setup fee plus monthly payments that include both principal and interest. The total amount you pay will be more than $5,000 because of the interest.

If you need to change or cancel your plan

If your circumstances change — your income drops, you get a job, or you receive a lump sum — you can modify your payment plan. Log into your IRS account and look for the option to change your agreement, or call 800-829-1040. You can request a lower monthly payment (which extends the plan length and increases total interest) or a higher payment (which shortens the plan and reduces interest).

If you want to cancel the plan entirely, you can do so, but you will still owe the full balance. The IRS may then pursue other collection methods. It is usually better to modify the plan than to cancel it, because a plan stops the IRS from taking other actions like wage garnishment or bank levies.

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 what you owe. The online tool will reject you if any tax year is unfiled. File your return through a tax professional, tax software, or the IRS Free File program, then set up the payment plan for the amount owed.

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

The online tool shows you payment options for different plan lengths — usually 24 to 72 months. Choose the longest option to lower your monthly payment. If even the longest plan is too high, you may need to request a plan by mail using Form 9465, where you can propose a payment amount and explain your financial hardship.

Will setting up a payment plan stop the IRS from garnishing my wages?

If you set up the plan before the IRS issues a wage garnishment, it will prevent one. If a garnishment is already in place, setting up a plan does not automatically stop it — you need to contact the IRS or the revenue officer handling your case to request that the garnishment be released once the plan is approved.

How long does it take for the plan to start after I set it up online?

Your first payment will be withdrawn on the date you selected during setup, usually within 10 to 15 days. You will receive a confirmation letter in the mail within two weeks. Do not make any other payments to the IRS until you receive this letter, as it will show your official plan terms.

Can I pay off my plan early without a penalty?

Yes. You can pay the full balance at any time without penalty. Contact the IRS or log into your account to request a payoff amount, which will include interest accrued through the date you plan to pay. Paying early saves you money on interest.