How to Set Up an IRS Payment Plan After Filing Back Taxes (Eligibility, Fees, and What Documents You Need)

Filing back taxes is a major step forward—but if you can’t pay the full amount you owe, the IRS may allow you to pay over time through a short-term payment plan or a long-term installment agreement. This guide walks you through eligibility, current IRS payment plan fees, and the documents you’ll need so you can set up a plan quickly and avoid escalating collection actions.

What Is an IRS Payment Plan?

An IRS payment plan (also called an installment agreement) lets you pay your tax debt in smaller payments instead of all at once. The IRS offers two main options:

Short-term payment plan (up to 180 days): no setup fee, but penalties and interest continue until paid.
Long-term payment plan (monthly installment agreement): has a setup fee (varies by how you apply and how you pay), and penalties and interest continue until paid.

Step 1: Confirm You’ve Filed All Required Back Tax Returns

Before the IRS will approve most payment plans, you generally must be current on filing—meaning all required tax returns have been filed (even if you can’t pay the balance yet). If you’re missing returns, the IRS may deny your request until they’re filed.

Tip: Even after filing, the IRS may apply future refunds to your balance due—even if you’re on a payment plan.

Step 2: Check IRS Payment Plan Eligibility (2025–2026 Rules)

Your eligibility depends on whether you’re applying as an individual or a business, and how much you owe in combined tax + penalties + interest.

Eligibility for individuals (online application)

You may qualify to apply online if:

Short-term plan (180 days or less): you owe less than $100,000.
Long-term plan (monthly installment agreement): you owe $50,000 or less, and you’ve filed all required returns.

Eligibility for businesses (online application)

A business may qualify to apply online for a long-term plan if:

You’ve filed all required returns, and
You owe $25,000 or less.

Important: For some business online plans, balances over $10,000 may require Direct Debit.

Step 3: Choose the Right IRS Payment Plan (Short-Term vs. Long-Term)

Option A: Short-term IRS payment plan (up to 180 days)

Choose this if you can pay the full balance within 180 days.

Pros

$0 setup fee
Fast to arrange online (for eligible individuals)

Cons

Interest and penalties still accrue until paid in full

Option B: Long-term IRS installment agreement (monthly payments)

Choose this if you need more than 180 days and want fixed monthly payments.

Pros

Predictable monthly payments
Can reduce immediate collection pressure if you stay compliant

Cons

Setup fees apply (see next section)
Interest and penalties continue until fully paid

Step 4: Understand Current IRS Payment Plan Fees (Setup Fees)

IRS fees depend on (1) whether you apply online and (2) whether you use Direct Debit.

Short-term payment plan fees

Apply online: $0 setup fee
Apply by phone/mail/in person: $0 setup fee

Long-term payment plan (installment agreement) fees

If you pay by Direct Debit (automatic withdrawals):

Apply online: $22 setup fee
Apply by phone/mail/in person: $107 setup fee

If you do NOT use Direct Debit (manual monthly payments):

Apply online: $69 setup fee
Apply by phone/mail/in person: $178 setup fee

Low-income taxpayers

Low-income taxpayers may qualify for reduced fees, waived fees, or reimbursement (depending on the plan type and how you apply).

Step 5: Gather the Documents You Need (Checklist)

What you’ll need depends on how you apply and how much you owe. Here’s a practical checklist.

Documents and info commonly needed for an IRS payment plan

Social Security Number (SSN) or ITIN (individual), or EIN (business)
The tax year(s) involved (example: “2022 Form 1040”)
Your total balance due (from your IRS notice or IRS online account)
Your proposed monthly payment amount and payment date
Bank routing and account number (if setting up Direct Debit)
A copy of your IRS notice (CP or other balance-due letter), if you received one

Forms you may need (if not applying online)

If you can’t apply online or the IRS requires more information, you may need:

Form 9465 (Installment Agreement Request)

In some cases, you may also need:

Form 433-F (Collection Information Statement) (when required by the Form 9465 instructions or the IRS for your situation)

Step 6: Apply for an IRS Payment Plan (Fastest Methods First)

Method 1: Apply online (recommended)

For most eligible taxpayers, the fastest approach is using the IRS Online Payment Agreement tool to request:

Short-term plan (up to 180 days), or
Long-term monthly installment agreement

You’ll choose your plan type, payment method (including Direct Debit if desired), and monthly payment amount.

Method 2: Apply by mail using Form 9465

If you’re not eligible to apply online—or prefer paper filing—you can submit Form 9465 by mail (and attach Form 433-F if required by instructions).

Method 3: Apply by phone

You can also request a plan by phone, especially if:

You can’t access online tools
You need to revise an existing plan
You’re dealing with an urgent notice

Step 7: Avoid Defaulting on Your IRS Installment Agreement

Once your plan is approved, the IRS expects you to:

Make payments on time every month
Stay current with future filings (file on time)
Avoid new unpaid balances (adjust withholding or estimated taxes as needed)

Best practice: If you can, use Direct Debit to reduce missed-payment risk and often lower the setup fee.

Frequently Asked Questions (FAQ)

Do IRS payment plans stop penalties and interest?

No. Penalties and interest generally continue until your balance is paid in full. A payment plan mainly helps you avoid more severe collection actions when you comply.

Can I set up a payment plan if I owe from multiple years?

Often, yes—IRS eligibility thresholds are typically based on your combined balance (tax, penalties, and interest).

What if I don’t qualify for an online IRS payment plan?

You may still be able to pay in installments by submitting Form 9465, and if required, Form 433-F, or by calling the IRS to discuss available options.

Final Checklist: Set Up Your IRS Payment Plan After Filing Back Taxes

[ ] Confirm all required back tax returns are filed
[ ] Check whether you qualify for short-term (180 days) or long-term monthly payments
[ ] Choose payment method (Direct Debit vs. manual payments)
[ ] Gather SSN/ITIN/EIN, IRS notice info, bank details (if Direct Debit)
[ ] Apply online (fastest) or submit Form 9465 (and Form 433-F if required)
[ ] Make every payment on time and stay current going forward