Setting up an IRS payment plan: your options and what they cost
How to set up an IRS payment plan: short-term plans up to 180 days, monthly installment agreements, 2026 setup fees, who can apply online and what it costs.
Prepared by Prem Tax and Accounting Corp. Last checked against official sources on October 25, 2026.
You can set up an IRS payment plan online in your IRS online account, or by mail with Form 9465. As of October 2026, a short-term plan of up to 180 days has no setup fee, while a monthly installment agreement has a fee that depends on how you apply and pay. Interest and penalties keep adding until you pay.
- A short-term plan gives up to 180 days. The IRS lists a $0 setup fee, and you can apply online if you owe less than $100,000 in tax, penalties and interest combined.
- A long-term plan (installment agreement) means monthly payments. You can apply online if you owe $50,000 or less and have filed all required returns.
- Fees listed by the IRS in 2026: $29 online or $107 otherwise for direct debit, and $69 online or $178 otherwise for other payment methods.
- Interest and some penalties continue until the balance is paid, so a plan spreads the bill but does not shrink it.
- File your return on time even when you cannot pay. The late-filing penalty is the larger one.
The two kinds of plan
| Plan | Length | Who can apply online | Setup fee (IRS, 2026) |
|---|---|---|---|
| Short-term payment plan | 180 days or less | Owe under $100,000 combined | $0 |
| Long-term plan (installment agreement) | Monthly payments | Owe $50,000 or less and filed all returns | $29 to $178, by method |
The long-term fee depends on two choices. Direct debit from your bank costs $29 online and $107 by phone, mail or in person. Paying another way, such as Direct Pay, a check, a money order or a card, costs $69 online and $178 otherwise. Lower-income filers may qualify for a reduced or waived fee.
How to apply
File first
Have every required return filed, even if you cannot pay the balance in full. File on time and the late-payment rate is lower once a plan is approved.
Pick the plan
If you can clear the balance within 180 days, a short-term plan costs nothing to set up. Otherwise choose a monthly agreement.
Apply online
Use your IRS online account. You get the result straight away.
Or use paper
Send Form 9465, the installment agreement request. The IRS may ask for more financial detail on a separate form.
Keep up the payments
Pay the agreed amount by the agreed date each month, and keep filing and paying future taxes on time.
Example (invented): Sam owes $6,000 after filing and can pay about $1,000 a month. A short-term plan fits, with no setup fee. If Sam could only pay $250 a month, a monthly installment agreement would be needed, and its setup fee would apply.
What a plan does not do
- It does not stop interest. Interest, and some penalties, keep building on the unpaid balance.
- It does not cover other debts, such as an Illinois balance. State plans are handled by the state.
- It is not a reduction of what you owe. Other options exist for hardship, so ask a CPA before choosing.
Common questions
Can I get a payment plan if I have not filed all my returns?
For an online long-term plan the IRS requires all required returns to be filed. File them first, then apply.
Does a payment plan stop penalties?
No. Interest and some penalties keep being added. If you filed on time, the late-payment penalty rate drops to 0.25% a month while an approved plan is in place.
What if I can only pay a small amount?
Apply for the long-term plan and say what you can afford. The IRS may ask for financial details on a separate form, and a CPA can help you prepare them.
Is there a free option?
A short-term plan has a $0 setup fee, and the IRS fee waiver for low-income filers applies to long-term plans.
Official sources
- IRS: Payment plans and installment agreements
- IRS: Failure to pay penalty
- IRS: Failure to file penalty
Keep reading
- How do I file a tax extension?
- When are taxes due?
- Behind on taxes or books?
- Got an IRS or state letter?
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