Owe money · IRS installment agreement · 2026 fees
IRS Payment Plan Calculator
Compare paying off a balance with vs without an IRS installment agreement. Uses the 2026 setup-fee schedule and the §6651(h) rule that cuts the failure-to-pay penalty in half while a plan is in effect — only if you filed the return on time.
The tax you owed on the return. On a CP14, use the tax line, not the total. This calculator adds the failure-to-pay penalty and interest from the return due date.
Only charges this calculator does not compute, such as an estimated-tax or accuracy penalty. Leave out failure-to-pay and interest. No penalty or interest is charged on them here; they add to the balance your monthly payments cover, and payments go to the tax first.
By the due date, including extensions. Required for the 0.25%/month reduced rate.
Filed and paid on time for the three prior years, with no penalty other than an estimated-tax penalty?
A penalty later removed for reasonable cause or IRS error still counts as clean. For a 2025 or later return this is the IRS's Automatic Exemption from Penalty (AEP): no failure-to-file or failure-to-pay penalty is assessed, and failure-to-pay does not accrue. Interest still runs.
The 0.25% rate applies only to months the plan is in effect; earlier months stay at 0.5%. Defaults to today, or the due date if that is later.
Direct-debit setup fee waived; non-direct-debit reduced.
The IRS requires both before it grants an installment agreement (IRM 5.14.1; the IRS payment plans page lists "filed all required returns").
Without installment agreement
$1,381
- Failure-to-pay: $625 (18 mo × 0.5% of the tax still unpaid)
- Failure-to-file: $0
- Interest: $756
- Setup fee: $0
With installment agreement
$1,223
- Failure-to-pay: $438 (5 mo × 0.5% + 13 mo × 0.25% of the tax still unpaid)
- Failure-to-file: $0
- Interest: $756
- Setup fee: $29 — Online + direct debit
Both cards assume 12 monthly payments of $833, the last on October 15, 2027, applied to the tax first. Failure-to-pay runs only on the tax still unpaid (IRC §6651(b)(2)); interest runs on that tax and, compounded daily, on the interest already charged (IRC §6622(a)). The penalties and interest are paid with the last payment. If you pay nothing until October 15, 2027, penalties and interest come to $1,985 with no agreement.
Interest from January 1, 2027 on is an estimate (rate not yet announced): it uses 7%, the 2026 Q4 rate, carried forward until the IRS publishes the next one.
You save with the plan
$159
If AEP applies to you (three clean prior years), no failure-to-file or failure-to-pay penalty is charged on either side: without an agreement $756, with one $785, so the agreement saves no penalty and costs its $29 fee. The figures above assume it doesn't.
Rough monthly payment estimate: $933 over ~12 months. The IRS computes your actual payment based on ability-to-pay — this is not the number they'll send.
Suggested path: Long-term Online Payment Agreement (requires all required returns filed).
Related
Sources & References
Primary references used for this content
Payment plans (installment agreements)
IRS fee schedule — page last reviewed 13-Aug-2026
View on irs.gov
Tax payment options
Direct Pay, short-term and long-term installment agreements
View on irs.gov
Reduced failure-to-pay penalty during installment agreement
0.25%/month vs 0.5%/month — timely-filed return required
View on law.cornell.edu
Administrative penalty relief (Automatic Exemption from Penalty)
2025 and later returns: no failure-to-file or failure-to-pay penalty with three clean prior years
View on irs.gov
✓4 primary sources; links re-checked on a weekly rotation by the source watcher
Disclaimer: This calculator provides estimates for educational purposes only. Not tax, legal, or financial advice. Results may vary based on your specific circumstances. Consult a qualified CPA or tax professional for personalized guidance.