How to set up an IRS payment plan when you cannot pay in full

You filed, or you are about to file by October 15, and the balance is more than you can pay. The wrong move is to hold the return until the money exists. The failure to pay penalty runs at 0.5% of the unpaid tax each month, and an approved plan cuts it in half, so file now and set up the plan the same day.

Pick the plan that fits your balance

A short-term plan gives you up to 180 days and has a $0 setup fee. You qualify if you owe less than $100,000 in combined tax, penalties and interest. A long-term plan, which the IRS calls an installment agreement, spreads the balance over monthly payments. You qualify online if you owe $50,000 or less combined and have filed every required return. As of September 2026 the long-term setup fee is $29 online with direct debit, $69 online without it, and $107 or $178 if you apply by phone, mail or in person. Low income applicants pay $0 with direct debit or $43 without, and the $43 may be reimbursed.

Get into your IRS Online Account

The online tool runs through your IRS Online Account, which needs a photo ID check the first time you create it. Before you start, have the balance from your return or IRS notice, and for a direct debit plan your bank routing and account numbers. The tool is open daily from 5 a.m. to midnight Eastern time.

Apply in the Online Payment Agreement tool

Open the Online Payment Agreement application and choose Apply/Revise as individual. A representative with a power of attorney uses Apply/Revise as individual POA instead. Choose short-term or monthly, set the monthly amount and due date, and enter the bank details if you chose direct debit. The IRS tells you on screen whether the plan is approved as soon as you submit.

Keep the agreement from defaulting

While the plan is approved, the failure to pay penalty drops to 0.25% a month, but interest keeps running, so pay it off early if you can. Make every payment on time, file every future return on time, and pay any future balance in full, because a missed step defaults the agreement. To change the payment amount or due date, switch to direct debit, or reinstate after a default, sign in to your Online Account and revise the plan. That costs $6 online or $89 by phone or mail as of September 2026.

If you owe more than $50,000. The online tool will not take a long-term plan. Mail Form 9465, Installment Agreement Request instead, or pay the balance down below $50,000 first and then apply online. The mailed route costs $107 with direct debit or $178 without.

If the tool turns you down. The usual causes are an unfiled prior year return or a balance over the limit. File the missing return, wait for it to post, and apply again. If you have an IRS notice, call the number printed on it. If you still need to file this year's return, see how to file by the October 15 extension deadline.

Sources. Payment plans and installment agreements, Online payment agreement application, Failure to pay penalty, About Form 9465.