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Regardless of your immigration status, it is important to file and pay your state and federal taxes. If you were lucky enough not to owe money and file on time, congratulations – you’re off the hook until next tax season! However, if you filed your taxes and owe money, you have a few options to pay what you owe. This guide will explain how a payment plan works and how to request one if you owe N.Y. state or the federal government money.  

Also read: What Immigrants Should Know About the IRS-ICE Data Deal This Tax Season

What are my options for paying my tax liability? 

A tax liability is the amount of money a person or business entity owes the government in taxes. If your liability is greater than your credits and deductions, then you will likely have a balance after filing. You can pay your federal tax liability in the following ways:

If your N.Y. state tax liability is greater than your credits and deductions, you can pay it off in the following ways:

  • If you can pay your balance in full within 60 days, you don’t need a payment plan but can request a one-time extension. You can call 518-457-5434 to ask for this extension, but make sure you have your taxpayer ID and bill or assessment number available when you call. 
  • You can request an installment payment agreement (IPA) where you pay your balance over an extended period of time. 

How do I set up a payment plan? 

A payment plan is an installment agreement that you enter into for the purpose of paying off any tax liability you owe. The federal government gives you the option of choosing a short-term or long-term plan if you owe less than $100,000 in taxes. 

  1. Before choosing a payment plan, you first have to create an IRS online account. 
  2. After setting up your IRS online account, you can choose the type of plan you want to enter. 
  3. Short-term plans are good options for people who want to pay off their liability within 180 days or less. There is a $0 setup fee for these plans, however, you will have to pay interest and accrued penalties until the amount is paid in full. 
  4. Long-term plans are good options for people who need more than 180 days to pay off their debt. There is a $22 setup fee for these types of plans, however, there is a waiver for people who meet the low income waiver requirement. These plans will also require you to pay the accrued interest and penalties until the amount is paid in full. 
  5. Once you choose your payment plan and accept the terms and conditions, your payments will either be automatically withdrawn from your bank account or you can start making payments via mail. 

N.Y. state allows people to request an installment payment agreement (IPA) if they have a balance of $20,000 or less and can pay off the balance in 36 months or less. To request an IPA, you need to follow these steps:

  1. Create an online services account. 
  2. Once you create this account, you can request an IPA. 
  3. However, if you owe more than $20,000 or need more than 36 months to pay off your balance, you can call 518-457-5434 to request a longer installment agreement. 
  4. Once you enter into an IPA, your payments will either be automatically withdrawn from your bank account or you can start sending payments via mail. 

Also read: How to Ask for a Tax Extension

What if I miss a payment? 

It’s important that you make your payments on time. However, if your personal circumstances change, you should contact the IRS so that adjustments can be made to your payment plan. If you entered into an IPA with New York State and missed a payment, you will not be charged a late fee, however, you will be sent notices and if you default, your bill will be sent to collections.   

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