State of Georgia Tax Payment Plans Overview
Payment Agreement (Installment Agreement)
Georgia’s Department of Revenue (DOR) offers taxpayers who owe GA state income taxes payment plans for those that cannot pay in full. The DOR refers to these payment agreements also as an Installment Agreement. These agreements provide taxpayers the ability to pay off their tax balance over a series of monthly payments. Payment plan agreements generally do not have durations longer than 60 months and they must satisfy penalties and interest. Taxpayers can request a payment plan, however, situations exist whereby a taxpayer will not qualify.
Situations Where DOR Will Not Approve a Payment Plan
Just like most state tax payment agreements, the DOR has a list of situations for when they will not approve a payment agreement or installment agreement.
In order for the DOR to review a request for a Payment Agreement the following must be met:
- The taxpayer must not be in bankruptcy,
- The taxpayer must not have a pending Offer-in-Compromise application filed,
- All of the taxpayer’s state tax returns required to be filed must be filed (usually the last five years), and
- The delinquent tax debt must not have been assigned to a private collection firm
- The taxpayer must agree and meet all future tax obligations (estimated taxes on time, filing on time)
How to Request and Set Up a Payment Plan With DOR
Individuals and businesses who owe the state of Georgia can set up a payment plan in a few different ways. The state requires a minimum payment amount of $25 dollar per month. DOR doesn’t seem to have set a debt limit threshold (like the IRS does) in requesting a tax payment plan. Moreover, taxpayers should always consider other alternatives since interest and the late payment penalty continues to accrue.
Leverage a Licensed Tax Professional
Taxpayers can reach out to a licensed tax professional or tax firm, who has the experience to negotiate payment terms within a budget. Using a tax professional will not only generally reduce the amount of time required by the taxpayer, but it will also generally lead to better results.
Submit a Request Through Georgia Tax center
The DOR provides taxpayers a way to request a payment agreement online. Taxpayers can request their payment plan online using the Georgia Tax Center. Once logged into the system, individuals and businesses can propose a payment amount and schedule.
With payment sent by electronic funds transfer (EFT), DOR charges a $50 dollar fee to set up the payment agreement. If the taxpayer remits monthly payments via paper check, the setup fee rises to $100. If the taxpayer qualifies as low-income, the DOR may reduce the fee to $25 dollars. In either case, the fee is non-refundable and gets added to the taxpayer’s overall tax balance in figuring out the monthly payment amount.
Submit a Paper Application
DOR encourages taxpayers to use the Georgia Tax Center to request a payment plan. However, they will accept paper applications that taxpayers can mail. Although the paper application doesn’t seem to be up to date with the 60-month new duration threshold, taxpayers can still utilize it. Taxpayers can find the paper application here.
Once complete, taxpayers can mail the request to:
Georgia Department of Revenue
PO Box 740396″
Atlanta, GA 30374-0396
Notification of An Accepted Payment Plan Agreement
Whether utilizing the online or paper application, the DOR will notify the taxpayer if they accept or deny their payment plan. The DOR states that taxpayers should expect to be notified as to the status of their Payment Agreement applications within 30 days after the DOR has received the application. If the DOR accepts the proposal, the taxpayer gets notified via mail. The letter will include the duration (number of monthly payments). It will also tell the taxpayer the amount of each monthly payment, and when the taxpayer must make the first payment.
Interest will continue to accrue on the delinquent tax debt, and the DOR may still confiscate state or federal refunds. However, all other forms of enforced collection will be suspended as long as the taxpayer stays current with the terms of the payment agreement.
Modifying An Existing GA Tax Payment Plan
If a taxpayer accrues a new balance or cannot make the monthly minimum payment on their existing agreement, DOR usually requires a new agreement. In this case, the DOR charges the taxpayer with a new set up fee. However, if the taxpayer simply needs to change their bank and routing number, they must notify DOR at 404-417-2122 at least five days before the next draft.
If the taxpayer has a check or draft fail for insufficient funds, the taxpayer will receive a “Cure/In Grace letter.” The letter will let them know when payment is due by with an additional $25 dollar return fee to prevent the agreement from going into default.
In summary, the DOR offers payment agreements for both businesses and individuals. DOR gives GA state taxpayers this option if they cannot pay their balance in full. When in doubt, leverage the help of tax professionals to assist or contact the DOR directly.
Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific advice regarding your tax situation, contact a licensed tax professional or tax attorney.