Massachusetts State Tax Payment Plan Guide

Taxpayers unable to pay their full Massachusetts state taxes may qualify for a payment plan through the Massachusetts Department of Revenue (DOR). Financial difficulties, unanticipated expenses, or missed deadlines can affect an individual’s or a business’s ability to remain current on tax obligations. The DOR offers structured installment agreements to support compliance and avoid immediate enforcement actions that allow for repayment over time.

This guide provides comprehensive information on establishing a tax payment plan with the Commonwealth of Massachusetts. It outlines eligibility criteria, the application process, acceptable payment methods, and the impact of interest and penalties during repayment. The objective is to help taxpayers resolve their outstanding liabilities while complying with state tax requirements.

Whether you are seeking a short-term extension or a long-term installment arrangement, this resource is designed to assist you in selecting a payment structure that aligns with your financial circumstances. With proper planning and adherence to the agreement terms, taxpayers can avoid default, reduce administrative burden, and maintain their accounts in excellent standing with the Massachusetts Department of Revenue.

What's the Massachusetts State Tax Payment Plan?

A Massachusetts state tax payment plan is a deal between a taxpayer and the Massachusetts Department of Revenue that lets certain people or businesses pay their taxes over time. The DOR doesn't require full payment by the due date. Instead, it offers structured payment options to help taxpayers keep track of their balance without immediately dealing with harsh enforcement.

People who cannot pay their full income or business tax bills in one payment typically use these plans. Different types of tax debts exist, and the repayment plans vary based on the taxpayer's financial situation and the amount owed. Most of the time, taxpayers can pay by check, money order, or automatic withdrawal from their bank account.

  A Massachusetts Tax Payment Plan:

• The Massachusetts Department of Revenue offers
  The DOR is in charge of payment plans open to individuals and businesses.
  
  
• A flexible payment plan
  The DOR sets minimum amounts for monthly payments that taxpayers can afford.
  
  
• Multiple payment options
  Checks, mail-in money orders, and electronic funds transfers are all accepted forms of payment. While credit card payments are not common for payment plans, they might be accepted for certain tax types.
  
  
• Interest and penalties still apply.
  Entering into a payment agreement does not stop the accrual of penalties. These charges continue until the full tax balance is paid.
  
  
• Formal agreement required
  The plan must be requested and approved. To avoid default, taxpayers must submit payment information, confirm their account number, and comply with all agreement terms.

A tax payment plan can help you stay current with your tax account, avoid serious enforcement actions, and maintain eligibility for other Massachusetts Department of Revenue services. However, it is not a form of forgiveness. Taxpayers are still responsible for the full payment amount, including interest and applicable penalties, throughout the plan.

Who Qualifies for a Tax Payment Plan?

If you can't pay your full tax bill by the due date, the Massachusetts Department of Revenue will let you set up a payment plan. Individuals and businesses may qualify but must meet specific requirements and send in all the required paperwork.

To be eligible, taxpayers must:

• Receive a formal notice
  You must have received a Notice of Assessment (first bill) or a Statement of Account (second). If you only received a Notice of Intent to Assess, you must wait until the official assessment notice is issued before requesting a payment plan.
  
  
• File all required tax returns.
  The DOR will not approve a payment agreement if your tax returns are missing or incomplete for the applicable tax year or period.
  
  
• Ensure tax accounts are current.
  You must be current on all other Massachusetts taxes and cannot have unresolved compliance issues related to your tax account.
  
  
• Separate business and individual liabilities
  The DOR does not allow you to combine personal and business debts into a single agreement. Separate plans must be established unless you are the company's sole proprietor or responsible person.
  
  

Taxpayers with a history of noncompliance, default, or prior collection actions may be subject to additional review. While most eligible taxpayers can access a payment plan, approval is not guaranteed and is subject to review by the DOR.

Types of Payment Plans Available

Payment plan options are based primarily on the total tax liability. The Massachusetts Department of Revenue separates plans into two categories: those for liabilities of $10,000 or less and those exceeding $10,000. Each has different application processes and payment structures.

1. Standard Plan for Liabilities of $10,000 or Less

• Minimum monthly payment: $25
  
  
• Maximum term: Up to 36 months
  
  
• Application: May be submitted online via MassTaxConnect
  
  
• Documentation required: Minimal; no financial disclosure forms required in most cases
  
  
• Payment method: Automatic withdrawals from a bank account are encouraged, but other methods such as check or money order are also accepted
  
  

2. Plan for Liabilities Over $10,000

• Minimum monthly payment: $50
  
  
• Maximum term: Determined based on financial analysis
  
  
• Application: Must be submitted with Form 433I (for individuals) or Form 433B (for businesses)
  
  
• Documentation required: Full financial disclosure, including proof of income, tax returns, and recent bank statements
  
  
• Payment method: Must complete EFT authorization for automatic withdrawals; other options may be limited
  
  

Note: While your payment agreement is under review, you may still be subject to tax collection activity. It’s essential to monitor your account and respond to requests for additional information from the DOR.

How to Apply for a Massachusetts Tax Payment Plan

The Massachusetts Department of Revenue offers several ways to apply for a tax payment agreement. Your application method depends on the total amount you owe and your preferred communication channel.

1. Apply Online via MassTaxConnect (For Liabilities of $10,000 or Less)

1. Visit MassTaxConnect
   Go to the MassTaxConnect website and access your account. If you don't have an account, create one with your SSN or tax ID and email.
   
   
2. Navigate to Payment Plan Request
   In the dashboard, click “More,” then select “Request a Payment Plan” under the Collection Notices section.
   
   
3. Enter Payment Information
   Submit your preferred payment type (weekly, biweekly, or monthly), payment amount, and due date of the first payment.
   
   
4. Set Up EFT Authorization
   Provide your bank account information to allow automatic withdrawals. This ensures timely bill payment and reduces the chance of default.
   
   
5. Review and Submit
   Confirm all details before submitting your request.
   
   

2. Apply by Phone

• For balances of $10,000 or less balances, call the DOR at (617) 887-6367.
  
  
• For balances over $10,000: Call (617) 887-6400.
  
  
• Have the following ready:
  
  
  
  • Taxpayer ID or Social Security Number
    
    
  • Tax year or tax period in question
    
    
  • Payment amount and method
    
    
  • Financial details, if applicable
    
    

3. Apply by Mail (For Liabilities Over $10,000)

If you owe more than $10,000, the DOR may require a manual application with supporting documentation.

Mail Application Steps:

1. Download and complete Form 433I (individuals) or 433B (businesses)
   
   
2. Gather supporting documents:
   
   
   
   1. Proof of income (recent pay stubs)
      
      
   2. Filed tax returns
      
      
   3. Recent bank statements
      
      
3. Complete EFT Authorization Form
   
   
4. Mail your package to:
   Massachusetts Department of Revenue
   Collections Bureau
   PO Box 7021
   Boston, MA 02204

Alternatively, you may fax your documents to (617) 660-3995. Processing may take several weeks, and penalties or interest may continue to accrue until your agreement is finalized.

Payment Terms and Repayment Options

Once approved for a Massachusetts tax payment plan, your repayment terms will depend on the total balance you owe and your financial capacity. The Massachusetts Department of Revenue offers flexible payment frequency and method options.

Common Payment Frequencies:

• Monthly payments (most common)
  
  
• Bi-weekly payments
  
  
• Weekly payments

You can choose the frequency that best aligns with your income schedule. Based on your liability, all payment schedules must meet or exceed the minimum monthly payment threshold that the DOR sets.

Accepted Payment Methods:

• Automatic withdrawals from a bank account
  We recommend this method for convenience and compliance.
  
  
• Check or money order
  Payments by mail must include your name, account number, and tax period.
  
  
• Credit card payment
  It may be available for certain bill payment types, but it is typically not standard for formal payment agreements.

Important Reminders:

• You must submit your payments on or before the due date specified in your agreement.
  
  
• The DOR may reject your plan if the payment amount does not satisfy the minimum requirement based on your balance.
  
  
• Once a plan is established, you must process each payment successfully.

Missing a scheduled payment may result in default and the resumption of collection activities. Always confirm that your payment method is active and your tax account is updated correctly with the DOR.

Financial Hardship and Special Considerations

Taxpayers facing severe financial difficulty may qualify for hardship-based relief. The Massachusetts Department of Revenue offers temporary hardship status for those unable to meet their basic living expenses and cannot pay their tax liability.

Situations That May Qualify as Financial Hardship:

• You receive government benefits (e.g., SNAP, SSI, housing assistance).
  
  
• You’re experiencing a medical crisis, hospitalization, or long-term illness.
  
  
• You’ve lost income due to incarceration, unemployment, or a natural disaster.
  
  
• You are homeless or at risk of eviction.

How to Request Hardship Status:

1. Contact the Hardship Team
   Call the DOR at (617) 887-6400 to speak with a hardship representative.
   
   
2. Submit Form M-911
   Complete the Taxpayer’s Application for Relief Due to Hardship and include documentation such as pay stubs, benefit letters, or proof of expenses.
   
   
3. Await Review
   The DOR will evaluate your request and determine whether to approve temporary hardship relief.

Effects of Approved Hardship Status:

• Temporary suspension of bank levies or wage garnishments
  
  
• Potential reinstatement of a suspended driver's license or professional license
  
  
• Exclusion from the public disclosure list
  
  
• No elimination of the debt; penalties and interest still accrue

Hardship status does not forgive your tax balance or stop enforcement permanently. It gives you time to recover while avoiding aggressive collection efforts. If your financial situation improves, you must notify the DOR within 30 days.

Penalties, Interest, and Accrual During Repayment

Entering a tax payment plan in Massachusetts does not stop the accumulation of interest or penalties. These charges apply until the full balance is paid, regardless of your agreement status.

Interest Rates:

• Interest accrues at 14% annually, calculated from the original tax due date until payment is completed.
  
  
• This rate applies to all income tax, business tax, and other tax liabilities.
  
  

Common Penalties Assessed by the Massachusetts Department of Revenue (DOR)

The Massachusetts Department of Revenue imposes various penalties to enforce compliance with state tax laws. These penalties are assessed every month and are subject to statutory limitations. Below is a summary of the most common penalties, their rates, and relevant legal citations.

1. Late filing penalty
When a taxpayer fails to file a required return by the original due date, a penalty of 1 percent per month, capped at 25 percent of the unpaid tax, is assessed.

Legal reference: Massachusetts General Laws, Chapter 62C, Section 33(a).

2. Late payment penalty
If a taxpayer files a return on time but does not pay the tax owed, a penalty of 1 percent per month applies until payment is made, up to 25 percent of the unpaid balance.

Legal reference: Massachusetts General Laws, Chapter 62C, Section 33(b).

3. Failure to pay the assessment penalty
This penalty is imposed when a taxpayer does not pay a formal tax assessment issued by the Department. The rate is 1 percent per month, with a maximum penalty of 25 percent of the assessed liability.

Legal reference: Massachusetts General Laws, Chapter 62C, Section 33(c).

4. Demand charge
A demand charge of $30 is assessed for each missed demand for payment issued by the Department of Revenue. There is no statutory maximum for the number of times this fee may be applied.

Legal reference: Massachusetts General Laws, Chapter 62C, Section 46 and Chapter 60, Section 15.

Key Notes:

• These penalties are applied monthly and are based on the unpaid portion of your bill.
  
  
• A payment plan helps prevent new enforcement actions but does not pause interest or penalty accrual.
  
  
• Staying compliant with your plan’s terms avoids additional penalties (e.g., for default).

Understanding these costs is essential for taxpayers planning their monthly payments. Paying more than the minimum is often better to reduce the total interest paid over time.

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What Happens If You Default on the Payment Plan

Missing one or more scheduled payments on your Massachusetts tax plan can have serious consequences. The Massachusetts Department of Revenue treats a breach of agreement as a default, which may trigger the reinstatement of collection actions and additional financial penalties.

Consequences of Default:

• You will receive a Notice of Payment Agreement Cancellation
  
  
• The DOR may file a tax lien against your property.
  
  
• Your bank account may be levied or your wages garnished.
  
  
• The DOR may suspend your driver’s license or professional license.
  
  
• Your state or federal refund may be intercepted.
  
  
• Your case may be assigned to a collection agency.
  
  
• Interest and penalties will continue to accumulate.

What to Do If You Miss a Payment:

1. Contact the DOR immediately
   Use the phone number on your payment notice or call (617) 887-6367 for balances under $10,000 or (617) 887-6400 for larger debts.
   
   
2. Request reinstatement of your payment agreement
   If your plan was canceled, you can restore it by making a missed payment and submitting a formal request.
   
   
3. Discuss hardship status if necessary.
   If you cannot make any payments, ask about hardship relief and Form M-911. Temporary relief may suspend enforcement while your financial situation stabilizes.
   
   

Proactively managing your tax account and maintaining communication with the DOR is essential to avoiding default-related consequences.

Benefits of Applying Early

Acting promptly when you receive a tax bill or notice from the Massachusetts Department of Revenue can significantly improve your repayment outcomes. Early application for a tax payment plan offers both financial and administrative advantages.

Why You Should Apply As Soon As Possible:

• Avoid aggressive collection actions
  Applying before enforcement begins can help you avoid bank levies, wage garnishments, and property seizures.
  
  
• Minimize additional penalties
  Interest and penalties continue to accrue, but early action can prevent new penalties triggered by missed deadlines.
  
  
• Preserve your driver’s license and professional licenses.
  An approved plan may help you maintain compliance and avoid license suspensions.
  
  
• Secure more favorable payment terms.
  When you apply early, you may have more flexibility in negotiating your payment amount, payment type, and duration of the agreement.
  
  
• Reduce stress
  Addressing your tax issues early helps prevent unexpected enforcement and gives you time to prepare monthly payments.
  
  

Delaying action increases the risk of enforced collections and can limit your payment options. Applying early is a proactive step toward financial stability and tax compliance.

Quick-Start Checklist for Applicants

This checklist is designed to help you stay organized and meet all the requirements before applying for a tax payment plan in Massachusetts.

Before You Apply

• Confirm you have received the appropriate notice.
  You must wait until you receive either a Notice of Assessment (first bill) or a Statement Review of the Account (second bill) before submitting a payment plan request.
  
  
• Verify that all required tax returns have been filed.
  The Massachusetts Department of Revenue will not approve a payment agreement if you have any unfiled tax returns for the applicable tax year or prior periods.
  
  
• Check your tax account balance and identify the tax period involved.
  Review your total liability and ensure you know which tax year or period the balance applies to before selecting your repayment terms.
  
  
• Create a MassTaxConnect account if applying online.
  If you plan to apply through MassTaxConnect, you must register and verify your account in advance to access the payment plan application.
  
  
• Determine how much you can realistically pay each month.
  Review your finances to calculate a monthly payment amount that meets the minimum requirement and fits your budget.
  
  
• Select your preferred payment method.
  Decide whether you will use automatic withdrawals from your bank account, send checks, or pay by money order. Ensure the account you plan to use has sufficient funds available.

 If You Owe More Than $10,000

• Download and complete the correct financial disclosure form.
  Individuals must use Form 433I, while businesses must complete Form 433B. Both forms are available on the Massachusetts Department of Revenue website.
  
  
• Gather all required supporting financial documents.
  This includes your most recent pay stubs, at least three months of bank statements, filed federal tax returns, and documentation showing your ongoing living expenses.
  
  
• Prepare a payment proposal.
  Clearly state your proposed monthly payment amount and payment type. Explain how you determined this amount based on your income and expenses.
  
  
• Complete and sign the Electronic Funds Transfer (EFT) Authorization Form.
  This form allows the DOR to withdraw payments from your designated bank account each month automatically.

Submitting Your Application

• Choose your submission method: online, phone, or mail.
  Submit your completed application through MassTaxConnect, by calling the DOR, or by mailing or faxing the required forms and documents to the address provided.
  
  
• Ensure all supporting documentation is included.
  Double-check your application package to confirm that all required forms, financial records, and signed authorizations are enclosed.
  
  
• Use the correct mailing address or fax number.
  To help prevent any delays, please send your completed forms to the DOR’s Collections Bureau using the address or fax number provided in the form instructions.
  
  
• Monitor your account and communications from the DOR.
  After submitting your application, regularly check your MassTaxConnect account or mail for updates or requests for additional information from the Department of Revenue.

Frequently Asked Questions

What is a tax payment plan in Massachusetts, and who is eligible?

A tax payment plan in Massachusetts is a formal agreement with the Massachusetts Department of Revenue that allows eligible individual taxpayers or businesses to pay their tax bill over time. To qualify, you must have received a notice, filed all required tax returns, and meet other compliance standards. Depending on your account status and payment type, payment options include monthly payments through automatic withdrawals, check, or money order.

Can I make a payment with a credit card or bank account?

Some payment types—estimated or bill payment—may be completed using a credit card or bank account. However, the Massachusetts Department of Revenue requires automatic withdrawals from a verified bank account for most formal payment agreements. Credit card payment options may not be available for long-term tax payment plans, but can be used for one-time payments, depending on the tax type and period.

How do I determine the payment amount for my agreement?

Your payment amount depends on your tax balance, income level, and the length of the payment plan. The DOR may require completing a financial disclosure form to determine a reasonable monthly payment. The total owed—including penalties and interest—must be factored into your proposed agreement. Use your tax account information to calculate what you can afford before you submit your request to the Massachusetts Department of Revenue.

Can I apply for a payment plan before filing my tax returns?

No, all required tax returns must be filed before establishing a payment agreement with the Massachusetts Department of Revenue. If your returns remain unfiled, the DOR will not review your request. Be sure to file for the applicable tax year, confirm your tax balance, and access your tax account using MassTaxConnect to ensure your account number and payment information are current.

What happens if I miss a due date on my payment plan?

If you miss a payment due date, your agreement may default, and the Massachusetts Department of Revenue may resume collection efforts. This could include tax liens, garnishments, or bank account levies. You should contact the DOR immediately to request reinstatement or update your payment method. Continued failure to pay can result in additional penalties and interest, making bringing your account back to good standing more challenging.

Can I send payments by mail, or do I need to pay online?

You may submit your tax payment by mail using a check or money order. Include your account number, payment amount, and tax year or period on the check. However, the DOR prefers automatic withdrawals from a bank account for most agreements. Mailing payments may be slower and increase the risk of missed due dates. Visit the DOR website to confirm acceptable payment methods for your situation.

What if my financial situation changes after starting a payment plan?

If your financial status improves or worsens, you must contact the Massachusetts Department of Revenue within 30 days to provide updated payment information. You may be required to submit a new form or modify your payment amount. Taxpayers who experience hardship may qualify for an extension payment or modified agreement. Failure to report changes may result in penalties, default, or cancellation of your tax payment plan in Massachusetts.