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IRS Payment Plan Calculator
By Priya Raman, Contributing Writer, Policy & RegulationEstimate the monthly payment on an IRS installment agreement, with ongoing penalties and interest.
By Priya Raman, Contributing Writer, Policy & RegulationEstimate the monthly payment on an IRS installment agreement, with ongoing penalties and interest.
Educational estimate built from the standard loan-amortization formula the IRS effectively uses for a level monthly payment. Actual terms come from the IRS.
This tool amortizes your balance the same way a loan calculator would: it spreads the debt across the months you pick so that every payment is the same size, with a bit more of each early payment going toward interest and penalty and a bit more of each later payment going toward the principal. Change any of the three fields above and the numbers update instantly, and the page's address updates too, so you can copy the link and send someone the exact scenario you just built.
The rate field is a stand-in for two things the IRS charges separately: interest, which resets every quarter, and the failure-to-pay penalty, which drops from 0.5% to 0.25% a month once your installment agreement is approved. Add those together on an annual basis and you land somewhere close to the 9% this calculator starts with, though your real rate will drift as the IRS resets interest each quarter. The table further down shows the actual current pieces.
Take the numbers this calculator loads with: an $18,000 balance, paid off over 48 months, at a combined 9% annual rate. Plug those into the amortization formula and the monthly payment comes out to $448. Over four years that is $21,501 paid in total, meaning $3,501 of the total is interest and penalty rather than tax. Stretch the same $18,000 to 72 months instead and the monthly payment drops, but the total interest and penalty paid climbs well past $3,501, because the balance sits unpaid for two more years. Shrink it to 24 months and the monthly payment roughly doubles, but the total cost drops close to the original balance. There is no free version of this tradeoff: faster payoff always costs less overall as long as the rate stays positive.
The default combined rate is a planning shortcut, not an IRS-published number. The real inputs behind it are published separately and change on their own schedules.
| Component | Current figure | Source |
|---|---|---|
| Underpayment interest, individuals (Q3 2026) | 7% per year, compounds daily | IRS.gov |
| Failure-to-pay penalty, once a plan is approved | 0.25% per month (about 3% per year) | IRS.gov |
| Streamlined plan eligibility | Balance of $50,000 or less, online application | IRS.gov |
| This calculator's starting assumption | 9% per year combined (editable) | Interest plus reduced penalty, rounded |
Because interest resets every quarter, treat the 9% default as a starting point and adjust the rate field to whatever the current IRS interest rate plus 0.25% a month works out to for your situation. See the full 2026 rates and thresholds reference for the quarter-by-quarter figures.
Most people who owe the IRS do not need an expensive relief company. They qualify for an installment agreement they can set up themselves online. The catch is that penalties and interest keep accruing on the unpaid balance, so a longer plan costs more overall. This calculator amortizes your balance so you can see the monthly payment and the true cost of stretching it out rather than paying aggressively.
Yes. Most individual taxpayers with a combined balance under $50,000 can set one up through the IRS Online Payment Agreement tool without mailing anything or paying a company to do it for them.
Yes. Interest and a reduced 0.25% monthly failure-to-pay penalty continue to accrue on the unpaid balance until it reaches zero, which is why this calculator shows total cost, not just the monthly payment.
Shorten the term. Every extra month you stretch a plan adds another month of interest and penalty on whatever balance is still outstanding, so paying faster is almost always cheaper in total.
No. This tool estimates a level monthly payment from the amortization formula. The IRS sets your actual terms when it approves your installment agreement, and your rate will differ from this calculator's default once interest resets next quarter.