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Installment Agreement (IA)
Pay your tax debt over time with manageable monthly payments
What is an Installment Agreement?
An Installment Agreement allows you to pay your tax debt over time through monthly payments. This is the most common IRS payment arrangement and is typically easier to qualify for than other relief options.
Types of Installment Agreements
Short-Term (180 days or less)
- For debts under $100,000
- No setup fee
- No formal agreement needed
- Simply request more time to pay
Long-Term (More than 180 days)
- For debts up to $50,000
- Monthly payments required
- Setup fee: $31-$225 (varies by payment method)
- May require financial disclosure
Partial Payment (PPIA)
- Monthly payment doesn't pay off full balance before statute expires
- Requires full financial disclosure (Form 433-F or 433-A)
- Reviewed every 2 years
Who Qualifies?
- You owe $50,000 or less (combined tax, penalties, and interest)
- You can pay off the debt within 72 months
- You've filed all required tax returns
- You haven't defaulted on a previous installment agreement
How Monthly Payments Are Calculated
For streamlined agreements (under $50,000):
- Minimum Payment: Total debt ÷ 72 months
- Example: $34,000 debt = $472/month minimum
- You can propose higher payments to pay off faster
For partial payment agreements, the IRS calculates based on your disposable income after allowable expenses.
Required Forms
- Form 9465: Installment Agreement Request (for debts over $50k or special situations)
- Form 433-F or 433-A: Collection Information Statement (if required based on amount)
- Online Application: IRS Online Payment Agreement tool (simplest method for under $50k)
Setup Fees
| Payment Method | Fee |
|---|---|
| Direct Debit (automatic bank withdrawal) | $31 |
| Low Income (Direct Debit) | $0 (fee waived) |
| Non-Direct Debit (check, card, etc.) | $130 |
| Low Income (Non-Direct Debit) | $43 |
Pros and Cons
Advantages
- Easy to qualify
- Stops collection actions
- Predictable monthly payments
- Can be set up online quickly
- Penalties reduced once agreement in place
Disadvantages
- Interest continues to accrue
- Setup fees apply
- Must stay current on future taxes
- Default can lead to immediate collection
- May not be best option if debt is too high
Next Steps
If you're ready to set up an installment agreement:
- Complete your financial analysis on the Dashboard
- Calculate your affordable monthly payment
- Gather recent income documentation
- Apply online or complete Form 9465
Ready to set up payments? Visit the IA Program Page to start your application.