Installment agreements allow DC taxpayers to pay a debt over time. It is important to note that installment agreements are not required by law, however the Office of Tax and Revenue may extend agreements as a courtesy. The agreement will be periodically reviewed, and the reviewing Revenue Officer may request financial documentation. Taxpayers must file any missing returns before requesting a payment arrangement.
It is important to pay your tax bills in full by the deadline to avoid interest, penalties, and the risk of a state tax lien being placed on your property.
Any balance left unpaid after the deadline will start accruing interest and penalties, which can further increase your financial burden. If you can’t pay your tax bill in full, pay as much as you can by the deadline.
REMINDER: An extension to file is not an extension to pay. If you file a return with a balance due after the tax due date you will be subject to penalties and interest.
OTR allows eligible business and individual taxpayers to self-service payment plans if:
- The length of the payment plan is 24 months or less
- Balance is under $100,000.00
An automatic lien will be filed if the installment agreement has:
- A balance greater than $25,000.00;
- If the balance is less than $25,000.00, a lien will be filed if the length of the plan is greater than 12 months.
Taxpayers are ineligible for creating an online installment plan if any of the following apply:
- Balance is already in an active payment plan.
- Two or more online payment plans were previously cancelled for the same debt.
- Liability cannot be assigned to a Third-Party Collection Agency.
- An active bankruptcy, garnishment, settlement, or Offer in Compromise exists on the account.
- Debt cannot have a linked liability, (i.e., Officer Assessment).
- Balance is currently not in a collectible status.
- Account has unfiled tax returns.
- Create a MyTax.DC.gov web portal, if you don’t already have one. To do this, visit www.MyTax.DC.gov and click Sign Up (below the Log In button).
- Log into your MyTax account.
- Select the More tab.
- Click on the Request Payment Agreement hyperlink in the Payment Agreement section
- Read the Payment Agreement eligibility and click Next.
- Read the Terms and Conditions and check the box to Agree.
- Review the liabilities included in the agreement and click Next.
- Select an agreement start date and how the payments should be calculated.
- Review the payment agreement schedule and click Next.
- Enter Bank Account information for the automatic withdraw and click Next.
- Taxpayer will enter password and click OK.
- Taxpayer can print a copy of the confirmation.
If your balance exceeds $100,000.00, or you require a payment plan longer than 24 months, please visit MyTax.DC.gov and submit a request for an extended payment plan.
The following documentation is required:
Businesses Only
- Form PA-1– Collections Information Statement for Individuals – Each owner of the company must complete this form.
- Form PA-2 – Collection Information Statement for Businesses
- Copy of latest Federal Return
- Profit and Loss Statement
- Previous 6 months of bank statements
- Trust Fund Recovery Assessment
Individuals Only
- Form PA-1 – Collections Information Statement for Individuals
- Copy of latest Federal Return
- Previous 3 months of Bank Statements
- Previous 2 pay stubs and/or profit and loss statement
Payment Agreement Rules
- OTR will apply DC and federal tax refunds and/or overpayments to the entire amount owed, until the liability is paid in full.
- ACH is required
- 10% Down payment
- OTR will apply payments to the oldest period first to satisfy the balance.
- The taxpayer is required to make monthly payments on their agreement and to file/pay current taxes timely or the agreement will be cancelled.
- A lien could be filed, and the taxpayer could be subjected to other enforcement actions.
- The taxpayer agrees to extend the statute of limitations for collection until the final payment is paid.
- The taxpayer agrees that the payment plan is not inclusive of any unknown liabilities incurred either before or after the date of the agreement.
- The agreement will stay in effect until the account:
- Is paid in full
- The statutory period for collection has expired, or;
- The agreement is terminated.
- Notification will be sent out from OTR prior to termination.
- Taxpayers are required to provide banking information for automatic ACH debit.
You are required to file any future returns on time and pay any future tax due on time. You are required to remit a payment each month throughout the life of your payment agreement.
NOTE: Interest will accrue throughout the life of the payment plan.
A payment agreement might be cancelled if you:
- Fail to provide financial information when requested
- Pay late or miss a payment
- Failure to file future returns and pay taxes on time
Progressive enforcement may continue if you default on your payment plan.
If your circumstances change or you have trouble making payments, please contact the Collection and Enforcement Administration (CEA) immediately at (202) 724-5045 or [email protected]. Or send a Web Message via your MyTax.DC.gov portal.