The Internal Revenue Service has expanded its IRS online payment system, giving more taxpayers access to streamlined payment plans. Starting in 2025, individual taxpayers with up to $50,000 in combined tax, interest, and penalties can apply for a payment plan directly through the agency’s website. The change is designed to help those who cannot pay their full income tax bill immediately, reducing reliance on paper forms, mail, and lengthy phone calls.
The IRS payment program now covers more taxpayers who owe back income tax. With the eligibility limit for Simple Payment Plans raised from $25,000 to $50,000 in combined balance due, interest, and penalties, over 90 percent of individual taxpayers now qualify. This expansion aims to reduce the number of accounts where tax bills remain unpaid and simplify the process for those who cannot pay in full immediately.
Taxpayers have several options available through the updated online payment system:
The application process is handled online through the IRS site. Users are prompted to provide recent tax return information, Social Security credentials, and the amount they owe. Payment options include direct pay from a bank account, credit card transactions where fees apply, or traditional check or money order. Once the application is complete, taxpayers receive immediate notice of approval or instructions on the next steps.
While these plans offer flexibility, interest and penalties continue to accrue on unpaid balances until fully resolved. Setup fees vary depending on the plan type and payment method. Using direct pay from a checking or savings account reduces processing fees and lowers the risk of missed scheduled payments. Automatic bank account withdrawals are required for balances between $25,000 and $50,000.
The expansion of online payment plans is part of the Internal Revenue Service’s broader effort to modernize taxpayer services. For years, individuals who could not pay their tax bills had to rely on the mail or long phone calls to set up installment agreements. By shifting to the federal tax payment system and electronic federal tax payment options, the agency is cutting delays and making repayment easier to manage.
Until recently, Simple Payment Plans were only available for balances under $25,000. Taxpayers who owed more faced more complex application procedures and higher fees. The new $50,000 limit simplifies enrollment, allowing taxpayers to resolve balances faster and reduce the long-term impact of interest and penalties.
While installment agreements cover the majority of taxpayers, the IRS also offers other relief measures. An offer in compromise may be available for taxpayers who cannot pay the full amount due and meet strict eligibility requirements. For those using older methods, options include paying by credit card, check, money order, or through the electronic federal tax payment system.
When announcing the changes, the Internal Revenue Service highlighted the importance of making payment plans more straightforward. In its newsroom update, the agency noted that the new system is “faster, simpler, and more accessible,” emphasizing that taxpayers can complete enrollment in minutes and receive immediate confirmation online.
IRS Commissioner Billy Long said the goal of the expansion is to modernize how the agency serves taxpayers. “We are building a more taxpayer-friendly IRS, one that makes it easier for people to meet their obligations while managing financial challenges,” he stated.
Tax professionals say the updates address long-standing frustrations. The IRS is reducing errors and missed payments by expanding access to online payment options and requiring direct pay from a bank account for higher balances. Experts also point out that allowing payments through credit cards, checks, money orders, or electronic federal tax payment systems gives households more flexibility.
Some advocates note that while installment agreements help most taxpayers, the costs tied to interest and penalties remain a burden for families already struggling. They suggest that more education on alternatives, such as an offer in compromise, would give taxpayers a clearer understanding of all available relief.
The IRS urges taxpayers who cannot pay their full balance to act quickly, since interest and penalties accumulate daily until the account is resolved. By applying for a payment plan online, individual taxpayers can avoid more severe collection actions and keep their accounts in good standing.
Taxpayers should visit the IRS site and use the Online Payment Agreement application to apply for a payment. Options include direct pay from a bank account, automatic withdrawals from checking or savings, credit card payments where fees apply, or sending a check or money order by mail. Taxpayers can also use the electronic federal tax payment system to schedule and track payments.
Once enrollment is complete, users can log in to review their payment history, change due dates, or update bank account details. Email notifications confirm when payments are scheduled or processed, helping taxpayers stay on track.
For those unable to complete the process online, the IRS advises contacting the agency directly through the notice received in the mail. If they cannot pay in full, taxpayers may also explore whether they qualify for an offer in compromise or other relief options. IRS publications, such as Topic 202 on tax payment options, provide further guidance.
Taxpayers should always check the date and the "last reviewed" note on IRS.gov pages to ensure they view the most up-to-date guidance before making payments or submitting an application.
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