IRS payment plan calculator.

How the estimate works

The IRS offers two kinds of plan, and the calculator reads your balance to tell you which one you can use online. A short-term plan gives you up to 180 days to pay in full; individuals can apply online when the combined tax, penalties and interest is under $100,000, and there is no setup fee. A long-term plan is a monthly installment agreement; the online route is open when you owe $50,000 or less and have filed every required return. Above that, you apply with Form 9465 (and the IRS may ask for Form 433-F), or by phone.

Then the page runs your payment month by month. Each month, interest is added at the rate you enter (the IRS rate for the current quarter, 7% for Q4 2026), converted to a monthly figure the way daily compounding works. The failure-to-pay penalty is added as a percentage of the unpaid tax. Your payment then comes off the balance, and the loop repeats until the balance is zero. The table at the bottom of the result solves the other way round: the monthly payment that would clear the balance in 12, 24, 36, 48 or 60 months.

The inputs, one by one. Total owed is the full amount on your latest IRS notice or account. Unpaid tax only matters because the penalty is charged on tax, not on penalties or interest. Failure-to-pay penalty rate is 0.5% a month normally; it falls to 0.25% a month while an approved plan is in effect if you filed your return on time; and it rises to 1% a month starting 10 days after the IRS issues a notice of intent to levy. Months already charged lets the 25% cap work correctly if you have been late for a while.

Setup fees

The IRS charges a one-time fee on long-term plans, and it depends on how you apply and how you pay. With direct debit the fee is $29 online and $107 by phone, mail or in person. With any other payment method it is $69 online and $178 offline. If your income is at or below 250% of the federal poverty level, the direct debit fee is waived and the other-methods fee is $43, which may be reimbursed if you meet the conditions. Revising an existing plan costs $6 online or $89 offline, and changing an existing direct debit agreement costs nothing. The checkbox above switches the fee lines to the low-income amounts.

Worked example (hypothetical balance, real rules)

Suppose you owe $12,000, of which $10,000 is unpaid tax, the rest being penalties and interest. You filed on time and can pay $400 a month. At the Q4 2026 rate of 7% and a 0.25% monthly penalty, the model clears the balance in 35 months. Over that time, interest adds about $1,285.00 and the penalty adds about $325.00, so you pay roughly $13,610.00 in total. If the same person had filed late and paid the penalty at 0.5%, the result becomes 35 months and $13,988.45: the rate cut on the penalty alone is worth about $378.45 here. A direct-debit online setup would add the $29 fee.

Now a case that fails. Owe $60,000 with $50,000 of tax, pay $300 a month. Interest alone at 7% is roughly $350 a month on that balance, more than the payment, so the balance never clears and the page says so. The fix is a higher payment, not a longer wait.

Common mistakes and edge cases

• Assuming the plan stops interest. Interest and the monthly penalty keep accruing until the balance is paid in full. A plan changes how you pay, not what accrues.
• Entering the penalty at 0.25% without filing on time. The reduced rate is for individuals who filed on time. If the return was late, use 0.5%.
• Forgetting the rate moves. The IRS rate is reset every quarter (see the quarterly rate table). A long plan will straddle several quarters, so treat the total as a range.
• Ignoring unfiled returns. The online long-term route needs every required return filed.
• Payment order. This tool assumes payments reduce the tax first. That is a simplifying assumption, not an IRS statement, and it only changes the penalty slightly.

Who this is for, and what it does not cover

It is for individuals who owe federal income tax and want to compare payment amounts before applying. It does not cover business payroll tax plans, offers in compromise, currently-not-collectible status, state tax plans, or the IRS's right to file a lien or levy. It does not know your plan's approved terms, the exact day interest compounds, or any penalty relief you might win. Penalty relief for reasonable cause or first-time abatement can lower the penalty and the interest on it, so ask before you assume the penalty is fixed.

FAQ

How does the IRS payment plan calculator work?

You enter what you owe, how much of it is tax, a monthly payment, the interest rate and the penalty rate. It adds interest and the failure-to-pay penalty each month, subtracts your payment, and repeats until the balance is zero. It also shows the payment that would finish the balance in 12 to 60 months.

What is the setup fee for an IRS payment plan?

A short-term plan of 180 days or less has no setup fee. For a long-term plan the fee is $29 online with direct debit, $69 online with other payment methods, $107 offline with direct debit and $178 offline otherwise. Low-income taxpayers pay $0 with direct debit or $43 otherwise, and the $43 may be reimbursed.

Does interest keep running on an IRS payment plan?

Yes. The IRS says interest and some penalty charges continue to be added until the balance is paid in full. The failure-to-pay penalty rate can fall to 0.25% a month if you filed on time and the plan is approved.

What is the difference between a short-term and a long-term plan?

A short-term plan lets you pay in full within 180 days or less, and individuals can apply online if they owe under $100,000. A long-term installment agreement spreads payments over monthly installments, and the online route is for individuals who owe $50,000 or less and have filed all required returns.

What interest rate does the IRS charge in 2026?

The underpayment rate is set each quarter. For 2026 it was 7% in Q1, 6% in Q2, 7% in Q3 and 7% in Q4. Sources that say 6% are quoting the second quarter. See the quarterly rate table for every quarter since 2017.

Can I pay less than the IRS minimum if I cannot afford it?

This calculator only shows what a payment does to your balance. The IRS decides what payment it will accept. If you cannot afford any plan, the IRS has other options, such as an offer in compromise or a hardship status, which this tool does not model.

Is the failure-to-pay penalty 0.5% or 0.25%?

It is 0.5% of the unpaid tax for each month or part of a month. If you filed on time as an individual and have an approved payment plan, it drops to 0.25% a month during the plan. It rises to 1% a month 10 days after a notice of intent to levy. The total is capped at 25% of the unpaid tax.

Sources

Retrieved 2026-10. Each link was opened and checked against the claim next to it.

• IRS: Payment plans and installment agreements: plan types, online thresholds ($50,000 and $100,000), setup fees, 250% poverty-level rule, interest continuing to accrue.
• IRS: Failure to pay penalty: 0.5% a month, 0.25% during an approved plan for on-time individual filers, 1% after a levy notice, 25% cap.
• IRS: Quarterly interest rates: underpayment rates by quarter.
• 26 U.S.C. 6651: statutory basis for the penalty rates, the installment-agreement reduction in subsection (h) and the levy-notice increase in subsection (d).
• IRS: About Form 9465: the installment agreement request form and the online application alternative.
• IRS: Penalty relief due to reasonable cause: penalty abatement and the interest that follows it.