The law requires all taxes to be paid in full. If you cannot make a payment in full by a certain date, the Department may agree to a payment plan that allows you to make installment payments on your tax debt. Please note that interest and penalty will continue to accrue.
A payment plan is a contract between you and the Department. When you are on a payment plan, the Department does not actively seek collection. If, however, you default on the agreement, the Department resumes collection of the tax. The Department offers different types of payment plans depending upon your specific case.
The Department’s self-service option allows taxpayers to create a custom payment plan for tax debts on its Taxpayer Access Point (TAP) portal. The program is available for all tax programs administered by the Department.
Taxpayers can choose the size of their down payment and the duration of the plan up to 72 months. Plans longer than 12 months require that a lien be put in place.
Many eligible participants will be accepted automatically; others will be contacted by a TRD employee to complete the process.
More information is available through the Taxpayer Access Point. Taxpayers will see the option once they’ve logged into their accounts.
Types of Payment Plans
Short-Term: Short-term payment plans allow you 12 or fewer months to pay off taxes. The Department sets up short-term payment plans normally without filing a lien. If a payment is missed, the Department terminates the agreement and proceeds with collection action.
Installment Agreements: Installment agreements are formal, written agreements between you and the state. Installment agreements allow you up to 72 months to pay tax debts. This type of agreement requires a lien to be filed on the balance or acceptable security prior to being granted. You declare definite liability by agreeing to an installment agreement.
Please note that records of installment agreements in excess of $1,000 must be available for public inspection.
Failure to make the minimum payment, making payments late, establishing new debt, or not timely filing required returns, will default your installment agreement.
Delinquent taxpayers on defaulted agreements are subject to further collection action. This may include serving levies to seizing funds and assets, including motor vehicles. If you are a delinquent taxpayer and a business owner, collection actions may include court orders to close a business or seize its assets. Taxpayers who default on short term agreements may also be subject to liens.