- A short-term plan (180 days or less) has no setup fee. You can apply online if you owe less than $100,000 in combined tax, penalties and interest.
- A long-term plan (monthly payments) can be set up online if you owe $50,000 or less and have filed all required returns. The online fee is $29 with direct debit and $69 with other payment methods.
- Interest and some penalties keep being added until the balance is paid in full.
- The fee is waived or reduced for low-income taxpayers whose adjusted gross income is at or below 250% of the federal poverty level.
The two kinds of plan
| Short-term plan | Long-term plan (installment agreement) | |
|---|---|---|
| Time to pay | 180 days or less | Monthly payments over a longer period |
| Apply online if | You owe less than $100,000 in combined tax, penalties and interest (individuals only) | You owe $50,000 or less in combined tax, penalties and interest and have filed all required returns |
| Setup fee | $0 online, and $0 by phone, mail or in person | $29 to $178, depending on payment method and how you apply (see below) |
What a long-term plan costs to set up
| Payment method | Online | Phone, mail or in person |
|---|---|---|
| Direct debit (automatic withdrawals from checking) | $29 | $107 |
| Other methods (Direct Pay, EFTPS, check or card) | $69 | $178 |
| Low-income, direct debit | Waived | Waived |
| Low-income, other methods | $43, reimbursable if conditions are met | $43, reimbursable if conditions are met |
Changing an existing plan costs $6 online or $89 by phone, mail or in person, and the low-income change fee is $6 online or $43 otherwise. Changes to an existing direct debit plan have a $0 fee. A reinstatement fee may apply if a plan goes into default.
The IRS says the low-income fee rule applies to individuals whose adjusted gross income is at or below 250% of the federal poverty level, for long-term plans entered on or after April 10, 2018. If you believe you qualify but were not identified, you can submit Form 13844 within 30 days of your acceptance letter.
How to apply
- Online, through your IRS online account and its payment plan tool.
- By mail with Form 9465, Installment Agreement Request.
- By phone: 800-829-1040 for individuals, or 800-829-4933 for businesses. Businesses should use the number on their notice.
Sole proprietors and independent contractors apply as individuals.
What keeps building while you pay
The IRS says interest and some penalty charges continue to be added to the amount you owe until the balance is paid in full. A plan spreads the payments out, so it does not stop that cost. The failure to pay penalty is lower while an approved plan is in effect, as explained in our guide to IRS late filing and payment penalties. The IRS also advises filing your return on time even if you cannot pay in full, because the failure to file penalty applies separately.
By our arithmetic, setting up a long-term plan by phone with a payment method other than direct debit ($178) costs $149 more than setting it up online with direct debit ($29). An installment agreement is the IRS’s name for a long-term payment plan, and a direct debit installment agreement is one where payments come out of your checking account automatically.
Picking between the two
If you can clear the balance in 180 days, the short-term plan avoids the setup fee. If you need more time, the long-term plan with automatic direct debit has the lowest fee at each level in the table above. The IRS page does not say how fast it decides on a request. If the bill came as a surprise, our guide to building an emergency fund covers starting small.
The IRS page lists three ways to apply directly with the IRS: online, by phone and by mail with Form 9465. The fees in the tables above are the IRS’s own.
Frequently asked questions
How much does an IRS payment plan cost?
A short-term plan of 180 days or less has a $0 setup fee. A long-term plan costs $29 online with direct debit, $69 online with other payment methods, $107 by phone, mail or in person with direct debit, or $178 with other methods. Low-income taxpayers may qualify for a waiver or reduced fee.
Who can set up a payment plan online?
The IRS says individuals who owe less than $100,000 in combined tax, penalties and interest can apply online for a short-term plan. For a long-term plan online, you must owe $50,000 or less and have filed all required returns.
Do I still pay interest on a payment plan?
Yes. The IRS says interest and some penalty charges continue to be added until the balance is paid in full.
What is the IRS phone number to set up a payment plan?
Individuals can call 800-829-1040. Businesses can call 800-829-4933 or use the number on their notice.
What happens if I default on the plan?
The IRS page says a reinstatement fee may apply if a plan goes into default.
Sources
- IRS: Payment plans; installment agreements (page last reviewed August 13, 2026)
- IRS: Failure to pay penalty (last reviewed October 23, 2026)
Each source was opened and read on October 26, 2026. See how we verify.