Installment Payment Agreements

Important:  Due to COVID-19, the due date for 2019 Individual Income Tax has been extended to July, 15, 2020.  We are unable to set up installment agreements on your 2019 income tax liability until you receive a Notice of Collection from NCDOR.  To make payments before establishing an installment payment agreement, use the D-400V application.

If you submit a request for your 2019 income tax liability and have not received a Notice of Collection, your request will not be processed.

Need help paying tax due? If a taxpayer has just filed a tax return and can't pay the tax due in full, they can use our website to make payments until they receive a notice. An Installment Payment Agreement cannot be set up until a Notice of Collection has been sent. Upon receipt of a Notice of Collection, the taxpayer should immediately request an Installment Payment Agreement to avoid forced collection action.

Common Questions

What are the requirements for an Installment Payment Agreement?

There are several requirements for the taxpayer and the Department. Please review these requirements carefully before making a request for an agreement.

The Department will consider an installment payment agreement if all of the following conditions are met:

  1. You MUST have received a Notice Of Collection, final bill, or final determination on all tax periods.
  2. You have NOT defaulted on a previous installment payment agreement on the same tax period(s).
  3. Your requested installment payment agreement amount must be greater than or equal to 10 percent of the following: wages, salaries, Federal Adjusted Gross Income, or North Carolina Taxable Income if Federal Adjusted Gross Income is not available.
  4. Your installment payment agreement cannot extend beyond the lesser of the following:
    1. Five (5) years
    2. Past the statute of limitations of a certificate of tax liability G.S. 105-242(c).
    3. Past the statute of limitations for assessing the responsible persons(s) of a business entity for any unpaid taxes listed under G.S. 105-242.2.
  5. A warrant for collection of taxes and/or attachment and garnishment is not currently in place on any tax period(s).

          The Department will allow an exception if all of the following conditions are met:

    1.  The garnishment is attached to wages and/or salaries.
    2. The installment agreement is greater than or equal to 10 percent of gross wages and/or salaries.
    3. A payment greater than or equal to the first payment is paid as a down payment.
  2. You must allow the Department to draft payments from your checking or savings account. Failure to make a scheduled payment, or if a payment is returned to the Department from the taxpayer's or financial institution, the agreement will be in default.

If you are unable to adhere to the above installment payment agreement requirements, AND have recieved a Notice of Collection, final bill, or final determination on all tax periods, you are encouraged to submit an Offer In Compromise to settle your liability, and you may be required to submit the following information:

  • Form RO-1062 (Collection Information Statement for Individuals).
  • Form RO-1063 (Collection Information Statement for Businesses).
  • Copy of last three (3) months bank account statements for all accounts.
  • Loan denial documentation from a financial institution.
  • Other supporting financial documentation as requested.

There is more available information about the NC Offer In Compromise process.

As part of the agreement, the taxpayer must:

  • File and pay all tax returns in full: The taxpayer must continue to file and pay all tax returns in full during the entire term of the installment payment agreement.
  • File and pay estimated income taxes: The taxpayer must remain current in paying estimated income taxes, and enter the correct filing status and number of allowable exemptions on their NC-4s.
  • Provide additional information, as needed: The taxpayer must provide the Department with any additional information if requested. The Department may perform periodic reviews of the taxpayer's financial condition during the term of the agreement to determine continued need as well as possible jeopardy of collection.

If the taxpayer cannot meet these requirements when the agreement is set up, or any additional requirements thereafter, the agreement will be in default. The taxpayer will not be able to re-establish an agreement once it is in default.

As part of the agreement, the Department:

  • Will not seize or levy property: The Department will not seize or levy upon any property during the term of the agreement unless the agreement defaults or unless the Department determines that the collection of the tax is in jeopardy.
  • Will not assess the Collection Assistance Fee: Unless it has already been assessed, the Department will not assess the 20% Collection Assistance Fee (G.S. 105-243.1(d)) during the term of the agreement. If the fee has already been assessed, it will be included in the balance due for the installment payment agreement.
  • Will offset refunds and lottery winnings: During the term of the agreement, the Department is required to offset any state or federal tax refunds and NC Education Lottery winnings. These will be applied to the taxpayer's debt and do not count as a scheduled payment.
  • Will provide written notification: The Department will provide a 30-day written notification if the terms of the agreement change because of the taxpayer's improved financial condition.
  • May issue a Certificate of Tax Liability: The Department may issue a NC Certificate of Tax Liability (CTL) to protect the State’s interest. This is a public record and may be reflected on the taxpayer's credit report. A CTL may be issued even if the agreement is not in default. If there are concerns about a CTL, please contact the departmental personnel handling the case before establishing the agreement.
  • Will take legal action if you default: The Department must take legal action to force collection of the tax immediately, and without notice, if the taxpayer defaults on any of the terms of the agreement.

Request an Installment Payment Agreement

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