“Can I pay my IRS tax bill in instalments?” This is one of the most common questions asked by taxpayers.
As you may know, filing an IRS tax return does not always result in a refund. In some cases, it means you have tax to pay instead.
If you find yourself in this situation and are unable to settle the full amount at once, here’s what you need to know about paying your IRS bill in instalments.
Paying Your IRS Tax in Instalments: Here’s How It Works
Instead of receiving a tax refund, many taxpayers discover that they have an amount due after submitting their IRS return.
If this applies to you, you will receive a tax assessment notice specifying the amount owed, with payment generally due by 31 August.
However, paying the full amount in one go is not always possible, particularly given the financial challenges many households face.
The good news is that you may be able to spread the payment over several instalments, and the process is relatively straightforward.
This option is generally available for tax debts ranging from 204 € to 5,000 €.
Below, we explain how the instalment payment system works.
Who Can Apply to Pay IRS in Instalments?
To qualify for an instalment plan, one of the main requirements is that you do not have any outstanding debts to the Portuguese Tax and Customs Authority (Autoridade Tributária e Aduaneira – AT).
In addition, you must have submitted your IRS tax return within the legal filing deadline, which is normally 30 June.
As mentioned above, the outstanding tax amount must also be between 204 € and 5,000 €.
How Does the Instalment Plan Work?
You may spread the payment over up to 12 monthly instalments, depending on the total amount owed.
The maximum number of instalments is generally as follows:
- €204 to €305 – Up to 2 instalments
- €351 to €500 – Up to 3 instalments
- €501 to €650 – Up to 4 instalments
- €651 to €800 – Up to 5 instalments
- €801 to €950 – Up to 6 instalments
- €951 to €1,100 – Up to 7 instalments
- €1,101 to €1,250 – Up to 8 instalments
- €1,251 to €1,400 – Up to 9 instalments
- €1,401 to €1,550 – Up to 10 instalments
- €1,551 to €1,700 – Up to 11 instalments
- €1,701 to €5,000 – Up to 12 instalments
If the amount due exceeds 5,000 €, you will need to apply for a formal instalment payment plan and provide a guarantee.
It is important to note that paying in instalments incurs interest, meaning the total amount paid will be higher than the original tax debt.
The annual interest rate in force for 2026 is 7.221%. However, this rate is reviewed annually, so you should always check the rate applicable in the year your payment plan is approved.
How to Apply for an Instalment Plan
The request must be submitted after 31 August, which is the usual deadline for paying the original tax assessment.
From that date, taxpayers generally have 15 days to submit their application through the Portuguese Tax Authority’s online portal (Portal das Finanças).
Once the application has been approved, the first instalment must be paid during the following month.
How Can You Make the Payments?
IRS instalments can be paid through:
- Online banking (home banking);
- Multibanco (ATM network);
- A local Portuguese Tax Office.
Payment notices are issued monthly and sent either to your registered tax address or electronically via ViaCTT, if applicable.
Keep in mind that missing a single instalment will cause all remaining instalments to become immediately due.
If this happens, you will lose the right to pay in instalments and may also become subject to tax enforcement proceedings.
If you have any questions or need assistance with your tax obligations, please do not hesitate to contact us.