How to Set Up an IRS Online Payment Agreement (OPA)

The IRS Online Payment Agreement tool lets you set up a payment plan for unpaid federal taxes in roughly 15 to 20 minutes and gives you an approval decision on the spot. You can choose a short-term extension of up to 180 days to pay in full, or a long-term installment agreement with monthly payments spread over as many as 72 months. The tool works on a computer or a phone, but it is not open around the clock.

Who Qualifies

Eligibility hinges on your balance and whether your returns are current. As an individual, you can apply online for a long-term installment agreement if your combined tax, penalties, and interest total $50,000 or less. The short-term plan has a higher ceiling of $100,000.¹

Businesses can apply online with $25,000 or less in combined assessed taxes, penalties, and interest. Out-of-business sole proprietorships get a $50,000 threshold.² Businesses owing more than $10,000 must set up direct debit.³

One rule applies to everyone: all required federal tax returns must be filed before the IRS will consider a payment plan.¹ If you have unfiled returns, file them first.

What It Costs

The short-term plan has no setup fee. Interest and the failure-to-pay penalty keep accruing on the balance for the full 180 days, so paying earlier costs less.¹

The long-term installment agreement carries a setup fee that depends on how you apply and how you pay:

Online with direct debit: $22
Online without direct debit: $69
Phone, mail, or in person with direct debit: $107
Phone, mail, or in person without direct debit: $178

Applying online with direct debit saves at least $47 compared with any other combination.¹

Low-income taxpayers pay a reduced fee of $43 for non-direct-debit agreements. Choose direct debit and the fee is waived entirely. If you qualify as low-income but cannot set up direct debit, the $43 fee is reimbursed after you finish paying.¹

What to Have Ready Before You Start

Gather everything in advance. The session can time out, and re-entering identity information takes longer than it should.

Your Social Security Number or ITIN, date of birth, and filing status from your most recent return
The tax period you owe for and the exact balance due, both shown on your most recent IRS notice. If you just filed and no notice has arrived, use the balance from the return.³
Bank routing and account numbers, if you plan to use direct debit
A driver’s license, state ID, or passport for identity verification through ID.me⁴

Business applicants also need their Employer Identification Number, the date the business was established, and the caller ID number printed on the IRS notice.³

Applying Step by Step

Start at irs.gov/payments/online-payment-agreement-application. The tool runs Monday through Friday from 6 a.m. to 12:30 a.m. Eastern, Saturday from 6 a.m. to 9 p.m. Eastern, and Sunday from 6 p.m. to midnight Eastern.³

If you do not already have an IRS online account, you will create one through ID.me. That involves uploading a photo of your government ID and taking a selfie with your phone or webcam. If the automated check fails, you can verify by video chat with an ID.me agent.⁴

Once inside, you enter the tax period and balance and choose between the short-term plan and the long-term installment agreement. For an installment agreement, the tool asks you to pick a monthly payment amount and a payment method. You review the terms, including the setup fee and ongoing interest, then submit. Approval or denial comes back immediately.

For monthly installments, you can pay by direct debit from checking, through IRS Direct Pay, from your IRS online account, by check or money order, or by debit or credit card. Businesses can also pay by phone through the Electronic Federal Tax Payment System.³ Direct debit removes the risk of a missed payment triggering default, and it earns you the lowest setup fee.

Interest and Penalties While You Pay

Both plan types charge interest on the unpaid balance, compounded daily. The rate resets each quarter. For the first quarter of 2026, the individual underpayment rate is 7% per year,⁵ dropping to 6% starting in the second quarter.⁶

The failure-to-pay penalty adds 0.5% of the unpaid tax per month or partial month, up to a 25% cap. An approved installment agreement cuts that monthly rate in half to 0.25%, provided you filed the underlying return on time.⁷ The short-term plan does not get that reduced rate.

Staying in Good Standing

An approved agreement carries two ongoing obligations. Make each monthly payment on time. And stay current on every future filing and payment: file returns by their deadlines, and pay any new tax balance or estimated tax in full.¹ That second requirement catches people off guard. You can be perfectly current on your installment payments and still default because you underpaid your estimated taxes for the current year.

If you know a payment will be short or late, contact the IRS before the due date. Modifying an agreement in advance is easier than reinstating one after a default notice.

Default and How to Fix It

When you miss a payment or fall behind on a new filing obligation, the IRS sends a CP523 notice warning that your agreement is about to be terminated.⁸ If you do not respond within 30 days, the IRS can cancel the agreement and accelerate the entire remaining balance. From there the IRS can file a Notice of Federal Tax Lien, or move to levy wages, bank accounts, or other property.⁹

If a CP523 arrives, act quickly. You can contact the IRS to make the overdue payment and ask for reinstatement before the termination date.⁸ Reinstatement carries a $10 fee, which may be reimbursed for low-income taxpayers.³

Changing an Existing Agreement

If your finances shift and you need a different monthly payment, you can revise the agreement online for $10. Modifying by phone, mail, or in person costs $89. If you are already on a direct debit agreement and just need to adjust the amount or date, there is no fee.¹

If You Owe More Than the Online Limits

Owing more than $50,000 as an individual or more than $25,000 as a business does not close off a payment plan. It just closes off the online tool. You have two ways in:

File Form 9465, the Installment Agreement Request. If your balance exceeds $50,000, attach Form 433-F, a Collection Information Statement detailing income, expenses, assets, and debts.¹
Call the IRS. Individuals: 800-829-1040. Businesses: 800-829-4933 or the number on the notice.¹

Expect to document your finances at the higher balance. The IRS uses Form 433-F to decide whether the monthly payment you propose is the most you can reasonably afford, so plan on providing pay stubs, bank statements, and records of major monthly expenses.

If You Cannot Afford Any Payment

The Online Payment Agreement assumes you can pay something each month. If your income barely covers basic living costs, two other tracks exist and both sit outside the online tool.

Currently not collectible status lets the IRS temporarily halt collection when it determines you cannot pay anything. The debt does not go away, interest keeps running, and the IRS reviews your finances periodically. Qualifying generally requires a Collection Information Statement (Form 433-F or 433-A) and documentation of assets, income, and expenses.¹⁰

An Offer in Compromise lets you settle for less than the full balance when you do not have enough income and assets to pay it off before the collection period expires. You must have filed all required returns, received a bill, and made any required estimated payments for the current year, and you cannot apply during an open bankruptcy.¹¹ The IRS generally will not accept an offer if you could pay the full amount through an installment agreement.

1
Internal Revenue Service. Payment Plans; Installment Agreements
2
Internal Revenue Service. Topic No. 202, Tax Payment Options
3
Internal Revenue Service. Online Payment Agreement Application
4
Internal Revenue Service. How to Register for IRS Online Self-Help Tools
5
Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026
6
Internal Revenue Service. Quarterly Interest Rates
7
Internal Revenue Service. Failure to Pay Penalty
8
Internal Revenue Service. Understanding Your CP523 Notice
9
Internal Revenue Service. Understanding a Federal Tax Lien
10
Internal Revenue Service. Temporarily Delay the Collection Process
11
Internal Revenue Service. Offer in Compromise Booklet, Form 656-B