Review of Illinois State Tax Installment Payment Plan
In similarity to the IRS, taxpayers who cannot pay off their tax balance in one payment may look to set up a tax payment plan with the State of Illinois Department of Revenue (DOR). Illinois refers to installment agreements or tax payment plans as “Installment Payment Plans.” An Installment Payment Plan is an arrangement where the taxpayer comes to an agreement with the Illinois Department of Revenue (DOR) to make monthly scheduled payments until the taxpayer pays off their tax debt.
The DOR will accept Installment Payment Plans from taxpayers who have delinquent tax liabilities and cannot pay in full. Generally, taxpayers who cannot pay in full have a financial hardship situation that prevents them from paying off their balance.
Ease of Payment Plan Dependent On Tax Debt Amount
Usually, Installment Payment Plans will be automatically accepted if the total delinquent tax debt is $5,000 or less. If the taxpayer owes more than $5,000, they will have to submit financial information detailing their assets, liabilities, and current and future income potential.
The taxpayer’s financial situation will be used to determine the proper monthly payment figure. Usually, the DOR will expect the taxpayer to pay off the delinquent tax debt within 12 months, but the state may give a longer duration (up to 24 months) with financial justification. However, exceptions may happen for certain financial circumstances with a manager’s approval. Before applying for an Installment Payment Plan, the taxpayer must be current with all tax return filings through the current date.
How To Apply for An IL Installment Payment Plan
Taxpayers can find the CPP-1, Installment Payment Plan Request form here for applying for an Installment Payment Plan. As a practical tip, taxpayers should offer a large down payment with their request if possible. Individual taxpayers who need to submit financial information with their Installment Payment Plan request need to fill out form EG-13-I the Financial and Other Information Statement for Individuals. Businesses need to fill out form EG-13-B or the Financial and Other Information Statement for Businesses. Taxpayers should fax the forms to 217-785-2635 or mail the forms to:
Installment Contract Unit
Illinois Department of Revenue
PO Box 19035
Springfield, Illinois 62794-9035
The DOR provides minimal information regarding how they determine if taxpayers qualify for an Installment Payment Plan. After the taxpayer has submitted their Installment Payment Plan request, the DOR will conduct a review. If they determine that the taxpayer qualifies for an Installment Payment Plan, they will mail an approval letter to the taxpayer which outlines the conditions of the plan. Usually, the DOR will require the taxpayer to make payments via automatic withdrawal (ACH) from a taxpayer’s savings or checking account. If the DOR determines you can pay off your entire tax balance, they will require the taxpayer to do so and deny their payment plan request.
How Taxpayers Can Make Their First Payment or Extra Payments
If the IL DOR approves a taxpayer for an installment payment plan, they can make their first payment or extra payments in a variety of ways using:
- MyTax Illinois – Taxpayers can find this at mytax.illinois.gov and can use the system to make electronic payments
- “Pay By Phone” – Taxpayers can call 1-866-490-2061. They will need their taxpayer ID, the routing number for their bank, and their bank account number.
- Mail – Taxpayers can make a payment by mailing their tax payment to the address listed above.
- Credit Card – Taxpayers can only use this payment method for individual income tax debt. Although taxpayers can make payments by credit card, credit card service providers will charge a convenience fee. To make a payment using this method, taxpayers can visit “MyTax Illinois” webpage. Alternatively, they can also call 1-866-490-2061 and select the credit card option. Therefore, taxpayers can avoid extra fees by submitting a payment without a credit card.
Other Details Taxpayers Should Know
With an IL tax installment payment plan, interest, penalties, and fees continue to accrue. Therefore, the faster taxpayers pay off their tax liability with the state, the less interest and penalties will accrue. Moreover, the DOR can file a tax lien at any time. Generally, the IL DOR will do so if it feels you may not honor your end of the agreement. If a taxpayer cannot afford the monthly payments with an Installment Payment Plan, they should look to apply for an Offer In Compromise.
Working With a Tax Professional
When in doubt, taxpayers should reach out to a tax professional or tax firm that can handle state tax issues. Before hiring anyone, taxpayers should request a free consultation to understand possible tax options and associated fees. If you owe the state of IL more than $10,000, call 1-888-349-2116 for a free consultation or submit a request using our online form.
Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific help regarding your tax situation, contact a licensed tax professional.