IRS Payment Plan Calculator

Estimate your IRS payment plan

Use the total from your IRS Online Account or your latest notice. The calculator uses the IRS figures we verified on 29 September 2026 and shows its working under “How this is calculated” in the results.

If the calculator does not load in your browser, the formula and a worked example below let you do the same estimate by hand or in a spreadsheet.

How the calculator works out your payment

The IRS charges two things on a balance you pay over time. The calculator models both, month by month.

• Interest at the federal short-term rate plus 3 percentage points, reset quarterly and compounded daily. The current rate is 7% (IRS.gov, Jul-Dec 2026) (announced in IR-2026-98 (IRS.gov, Q4 2026)). Interest runs on the whole balance, including penalties and earlier interest.
• The failure-to-pay penalty on the unpaid tax: 0.25% (IRS.gov, 2026) a month during an approved plan if you are an individual who filed on time, otherwise 0.5% (IRS.gov, 2026) a month, up to a total of 25% (IRS.gov, 2026) of the tax.

The formula

1. Monthly interest factor = (1 + annual rate ÷ 365) raised to the power 365 ÷ 12, minus 1. This turns daily compounding into an average month.
2. Each month: interest = balance × monthly factor; penalty = penalty rate × unpaid tax (stopping when the penalty total reaches the cap); new balance = balance + interest + penalty − payment.
3. Payments are assumed to reduce the tax first, so the penalty shrinks as you pay.
4. The monthly payment is the smallest level amount, rounded up to the cent, that brings the balance to zero in the number of months you chose. The last payment is usually a few cents to a few dollars smaller.

With no interest or penalty, this would simply be balance ÷ months. The difference between that and the result is the cost of time.

Worked example

Example (assumed figures): an individual who filed on time owes $20,000, all of it tax, at an assumed 7% annual rate with the reduced plan penalty rate. The monthly interest factor is (1 + 0.07 ÷ 365) to the power 30.4167, minus 1, or about 0.585%. Over 60 months:

• Payment without interest or penalty: $20,000 ÷ 60 = $333.33.
• Estimated payment with both: $418.21 a month.
• Total paid: about $25,092, of which about $3,872 is interest and about $1,221 is penalty.
• If the return had been filed late, the penalty would stay at the full monthly rate and the payment would rise to about $438.40.

The same assumed balance over different terms:

The IRS puts it plainly on its payment plans page: the longer the term you choose, the more interest and penalties you will owe. The IRS’s own figures will differ slightly because it applies each quarter’s rate and posts payments on the day they arrive.

Assumptions and last update

Last updated: 29 September 2026, using the rate for October to December 2026. We review the interest rate every quarter, and fees and limits when the IRS changes them; every change is logged on the key figures page.

• The rate stays the same. The IRS resets the rate each quarter. If it rises, your balance grows faster than the estimate; if it falls, slower.
• No penalty charged yet. The cap on the failure-to-pay penalty counts penalties already charged before the plan. If you have already been charged some, the real penalty during the plan may be lower.
• Tax portion. If you leave the optional “how much is tax” field blank, the calculator treats the whole balance as tax. That overstates the penalty a little, which keeps the estimate on the cautious side.
• On-time payments, no new balance. A missed payment or a new unpaid tax bill can put a plan in default.
• Term cap. A plan must pay in full by the CSED. The IRS generally has 10 years (IRS.gov, 2026) from assessment to collect, so the calculator never goes past 10 years, or your CSED if you enter an earlier one.
• Nothing is stored. The calculator runs in your browser and sends nothing to us or anyone else.

Simple Payment Plan limits, pay-down and setup fees

The calculator tells you whether your balance is within the Simple Payment Plan (formerly the streamlined installment agreement) limit and, if not, how much you would need to pay down. The limits count assessed tax, penalties and interest:

Example (assumed figures): you owe $53,400. Paying $3,400 through IRS Direct Pay brings the balance down to the individual limit of $50,000. Once that payment posts, you can apply for a Simple Payment Plan instead of filing a financial statement. A business with trust fund taxes must make the pay-down before the plan is granted; the first installment cannot be the payment that gets it under the limit.

Setup fees for a long-term plan

Low income means adjusted gross income at or below 250% (IRS.gov, 2026) of the federal poverty level. A short-term plan, paid within 180 days (IRS.gov, 2026), has a setup fee of $0 (IRS.gov, 2026). The calculator adds each fee to your estimated total so you can compare.

What to do with your estimate

1. Check that the payment fits your budget. A plan you can’t keep up with defaults. If no term gives an affordable payment, look at a partial payment installment agreement or an offer in compromise, or run the eligibility checker.
2. File anything missing. The IRS will not approve a plan until every required return is filed and this year’s withholding or estimated payments are up to date.
3. Apply yourself if you can. Individuals who owe $50,000 (IRS.gov, 2026) or less can apply in the IRS Online Payment Agreement tool and get an answer right away. You can also call, mail Form 9465 or visit a Taxpayer Assistance Center.
4. Choose direct debit if a lien matters. With a balance of $25,000 (IRS.gov, 2026) or less, a direct debit plan that pays in full within 60 months (IRS.gov, 2026) can make you eligible to ask for a filed lien to be withdrawn. See tax lien relief.
5. Ask about penalties. If you have a clean history, first-time abatement or the Automatic Exemption from Penalty may remove late-filing and late-payment penalties. See penalty relief.

Frequently asked questions

Keep reading in the Fresh Start hub

• IRS payment plansEvery IRS payment plan option compared, with fees and how to apply.
• Simple Payment PlanThe 2026 rules that replaced the streamlined installment agreement.
• Eligibility checkerTen questions to see which Fresh Start options may fit.
• Fresh Start qualificationsWho qualifies for each option, and what every option requires.
• Offer in compromiseWhen you can't pay in full before the collection statute ends.
• Penalty reliefRemove late-filing and late-payment penalties before you start a plan.