An IRS installment agreement is the most common way out of tax debt. It’s straightforward to apply for, and if you owe under $50,000 you can usually do it online without speaking to anyone.
But the monthly payment is only part of the picture. Interest keeps accruing on the unpaid balance for the entire life of the agreement. This calculator shows what you’ll actually end up paying.
Installment Agreement Calculator
Educational estimate. The IRS requires a minimum monthly payment, generally balance ÷ 72 months at the lowest. Interest is compounded daily and the FTP penalty (0.25%/mo while in IA) accrues on the unpaid balance. For a precise quote, log into your IRS Online Payment Agreement.
How IRS installment agreements work
There are four broad tiers, depending on what you owe:
Short-term plan (≤ 180 days)
If you can pay in full within 180 days, this is the cheapest option. No setup fee. Interest and the failure-to-pay penalty (0.5%/mo) keep accruing until paid in full, but you avoid the IA paperwork.
Streamlined installment agreement (balance < $50,000)
The most common path. Up to 72 months to pay. Online application takes 10 minutes. The IRS doesn’t ask for financial disclosure.
Long-term streamlined (balance $50,001–$250,000)
Up to 84 months in some cases. Online if you commit to direct debit. May require limited financial disclosure (Form 433-F).
Non-streamlined / regular installment agreement (over $250,000, or if you can’t meet streamlined terms)
Requires Form 433-A (individual) or 433-B (business) — full financial disclosure. IRS sets the monthly payment based on your “ability to pay” calculation. This is where most people benefit from a tax professional.
Setup fees (current as of 2026)
| Method | Setup fee |
|---|---|
| Direct debit, online | $22 |
| Direct debit, phone or mail | $107 |
| Non-DDIA, online | $69 |
| Non-DDIA, phone or mail | $178 |
| Low-income filer (≤ 250% federal poverty) | $0 |
Direct debit is required for balances over $25,000. It’s also the cheapest fee. Set it up to come out the day after payday.
What still accrues during an installment agreement
- Interest — compounded daily on the unpaid balance, currently 8% annual. Does not stop.
- Failure-to-pay penalty — drops from 0.5%/mo to 0.25%/mo the day your IA is approved.
- The CSED clock keeps running — installment agreements do not suspend the 10-year statute. (See CSED Calculator.)
When an IA is the wrong move
- If your Reasonable Collection Potential is well below your balance, an Offer in Compromise will save more money.
- If you genuinely can’t pay anything without skipping rent or food, request Currently Not Collectible (CNC) status instead. It pauses collection — interest still accrues but the IRS stops enforcement.
- If your CSED is within ~3 years, a partial-pay installment agreement lets you pay a small monthly amount and have the balance expire when the statute runs out.