What will my tax payment plan cost?
Type what you owe and how many months you need. The page works out a level monthly payment with IRS interest and the failure-to-pay penalty, and adds the 2026 setup fee for your plan.
- Monthly payment
- $322.76
Paying $10,000.00 over 36 months costs about $322.76 a month, plus a $29.00 setup fee.
- Setup fee
- $29.00
- Interest
- $1,134.63
- Failure-to-pay penalty
- $484.90
- Total cost
- $11,648.53
- Plan type
- Long-term (monthly installments)
- Note
Monthly payment: $322.76. Paying $10,000.00 over 36 months costs about $322.76 a month, plus a $29.00 setup fee.
Monthly payment by months to pay
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Estimates the monthly payment on an IRS payment plan (installment agreement), with daily interest, the reduced failure-to-pay penalty, and the 2026 setup fee.
Example with the default inputs (Amount you owe $10,000.00, Months to pay 36, How you apply Online, Direct debit from a bank account Yes, Low income No, Return filed on time Yes, IRS interest rate 7%): Paying $10,000.00 over 36 months costs about $322.76 a month, plus a $29.00 setup fee.
Method: Monthly interest i = (1 + rate ÷ 365)^(365 ÷ 12) − 1; monthly penalty p = 0.25% (0.5% if the return was late). Payment = B × j ÷ (1 − (1 + j)^−n) with j = i + p. Each month the balance grows by i + p and the payment comes off. Setup fee: $0 short-term; long-term $29 online direct debit, $69 online, $107 phone direct debit, $178 phone; low income $0 direct debit or $43.
- 2026 setup fees and the 7% fourth-quarter 2026 interest rate from irs.gov; the rate changes each quarter, so type the current one.
- Interest compounds daily on the balance; the page takes it monthly, with each payment at the end of the month. The penalty is charged on the whole unpaid balance; the IRS charges it on unpaid tax only, so this overstates it a little when the balance already holds penalties and interest. The 25% penalty cap is never reached within 72 months.
- The IRS decides whether you qualify. It is an estimate, not tax advice.
Worked examples
Each example is checked against the calculator on every build.
- Amount you owe $10,000.00, Months to pay 36, How you apply Online, Direct debit from a bank account yes, Return filed on time yes, IRS interest rate 7% gives Monthly payment $322.76, Setup fee $29.00, Interest $1,134.63, Failure-to-pay penalty $484.90.Source: IRS, Payment plans; installment agreements, https://www.irs.gov/payments/payment-plans-installment-agreements; IRS Quarterly interest rates, https://www.irs.gov/payments/quarterly-interest-rates
- Amount you owe $5,000.00, Months to pay 6, How you apply Phone, mail or in person, Direct debit from a bank account no, Return filed on time yes, IRS interest rate 7% gives Setup fee $0.00, Plan type Short-term (180 days or less).Source: IRS, Payment plans; installment agreements, https://www.irs.gov/payments/payment-plans-installment-agreements; IRS Quarterly interest rates, https://www.irs.gov/payments/quarterly-interest-rates
- Amount you owe $20,000.00, Months to pay 72, How you apply Phone, mail or in person, Direct debit from a bank account no, Return filed on time no, IRS interest rate 7% gives Setup fee $178.00.Source: IRS, Payment plans; installment agreements, https://www.irs.gov/payments/payment-plans-installment-agreements; IRS Quarterly interest rates, https://www.irs.gov/payments/quarterly-interest-rates
- Amount you owe $12,000.00, Months to pay 24, How you apply Online, Direct debit from a bank account yes, Low income yes, Return filed on time yes, IRS interest rate 0% gives Setup fee $0.00.Source: IRS, Payment plans; installment agreements, https://www.irs.gov/payments/payment-plans-installment-agreements; IRS Quarterly interest rates, https://www.irs.gov/payments/quarterly-interest-rates
How it works
Inputs: the balance B owed now, the number of monthly payments n (1 to 72), the yearly IRS interest rate r in percent, and whether the return was filed on time.
- Monthly interest: i = (1 + r ÷ 100 ÷ 365)^(365 ÷ 12) − 1, the daily compounding of a 365-day year over one twelfth of a year.
- Monthly penalty: p = 0.25% if the return was filed on time, 0.5% if not.
- Monthly payment: with j = i + p, payment = B × j ÷ (1 − (1 + j)^−n). If j is 0, payment = B ÷ n.
- Each month the balance b grows by b × i of interest and b × p of penalty, and the payment comes off at the end of the month. After n payments the balance is 0. Interest and penalty are the sums of these monthly amounts.
- Plan type: short-term when n is 6 or fewer and B is under $100,000; otherwise long-term.
- Setup fee (2026): short-term $0. Long-term: online with direct debit $29, online without $69, phone, mail or in person with direct debit $107, without $178. Low income (either way of applying): $0 with direct debit, $43 without.
- Total cost = payment × n + setup fee.
A note says when a long-term plan applied for online is above the $50,000 online limit, when the balance is too big for a short-term plan, and when the $43 low-income fee may be reimbursed.
Simplifications: the IRS charges the penalty on unpaid tax only, while the page charges it on the whole balance, so it overstates the penalty a little when the balance already holds penalties and interest. Over 72 months on a falling balance the 25% penalty cap is not reached. The interest rate changes each quarter; type the current rate. Nothing is rounded until it is shown, to the cent, halves up. It is an estimate, not tax advice.
When the data is out of date
The setup fees and the default 7% rate are for 2026. After December 31, 2026 the page keeps using them and says so above the result.
Worked examples by hand
$10,000 over 36 months, online, direct debit, on time, 7%. i = (1 + 0.07 ÷ 365)^(365 ÷ 12) − 1 = 0.0058498; j = 0.0083498. Payment = 10,000 × 0.0083498 ÷ (1 − 1.0083498^−36) = $322.76. Interest $1,134.63, penalty $484.90, fee $29.
$5,000 over 6 months by phone. A short-term plan: $0 setup fee.
$20,000 over 72 months by phone, no direct debit, late return. Long-term, fee $178; the penalty is 0.5% a month.
$12,000 over 24 months online with direct debit, low income. Fee $0 (waived).
Other questions people ask
How much does an IRS payment plan cost to set up?
In 2026, a short-term plan (180 days or less) has no setup fee. A long-term plan costs $29 online with direct debit, $69 online without it, $107 by phone, mail or in person with direct debit, and $178 without it. Low-income taxpayers pay nothing with direct debit, or $43 that may be reimbursed.
Does interest keep growing on a payment plan?
Yes. Interest at the IRS underpayment rate (7% a year in the fourth quarter of 2026) compounds daily on the unpaid balance until it is paid. The failure-to-pay penalty also continues, at a lower rate.
What is the failure-to-pay penalty on a payment plan?
Normally 0.5% of the unpaid tax for each month. If you filed your return on time and have an approved plan, it drops to 0.25% a month. It never goes above 25% of the unpaid tax.
How long can an IRS payment plan last?
A short-term plan lasts up to 180 days and needs less than $100,000 owed. A long-term plan applied for online needs $50,000 or less owed and usually runs up to 72 months.
How is the monthly payment worked out?
The page treats the debt like a loan: each month the balance grows by the monthly interest and penalty, and a level payment pays it off in the months you choose. $10,000 over 36 months at 7% with the 0.25% penalty is about $322.76 a month.
Can I pay off the plan early?
Yes. Paying more or paying off early cuts the interest and penalty, since both are charged on the balance still owed.