Installment Payment Agreements
We are unable to set up installment payment agreements on your tax liability until you receive a Notice of Collection from NCDOR.
- If you submit an installment agreement request for your tax liability and you have not received a Notice of Collection, your request will not be processed.
- To make payments on your income tax liability before you receive a Notice of Collection, use the D-400V application.
If you have filed a tax return, and cannot pay the tax due in full, you may be eligible to request an installment payment agreement.
An Installment Payment Agreement cannot be set up until a Notice of Collection has been mailed to you. Upon receipt of a Notice of Collection, you should immediately request an Installment Payment Agreement to avoid forced collection action. Penalties, fees, and interest may be added to any balance not paid by the due date.
You should use the DOR website to initiate an installment payment agreement electronically. The Form RO-1033 Installment Agreement Request must be completed by using our website. Please keep in mind that this form is a request and there may be additional steps to confirm your agreement with NCDOR.
After you submit your Installment Agreement Request, you will receive a return email from NCDOR. It is important to open this email, as it will either:
- Confirm NCDOR has accepted your request by informing you that your agreement request has been completed.
- Decline your request by informing you that the Department was unable to process your request. This email may include:
- The reason we were unable to process your request.
- Instructions to call 1-877-252-3052.
There are several requirements for establishing an installment payment agreement. 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:
- You MUST have received a Notice of Collection, final bill, or final determination on all tax periods.
- You have NOT defaulted on a previous installment payment agreement on the same tax period(s).
- Your installment payment agreement cannot extend beyond the lesser of the following:
- Past the statute of limitations of a certificate of tax liability G.S. 105-242(c).
- 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.
- A warrant for collection of taxes and/or attachment and garnishment is not currently in place on any tax period(s).
- 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.
- The period(s) are not under criminal prosecution by the Department.
The Department will allow an exception if all of the following conditions are met:
- The garnishment is attached to wages and/or salaries.
- The installment agreement is greater than or equal to 10 percent of gross wages and/or salaries.
An installment agreement may be established under one of the following conditions:
The installment payment agreement is less than or equal to 12 monthly installments, regardless of wages, salary or income amount.
The installment payment agreement is greater than or equal to 7.5 percent of the following: wages; salaries; Federal Adjusted Gross Income; or North Carolina Taxable Income if Federal Adjusted Gross Income is not available.
Information reflecting to wages, salaries, Federal Adjusted Gross Income and/or North Carolina Taxable Income must be provided to the Department if requested. If there is no information available to verify income, see exception process below.
The Department will consider an exception to the requirements above if one of the following additional conditions are met:
- You can demonstrate you are financially unable to adhere to the above installment payment agreement conditions.
- Your liability is due to a multi-period audit assessment(s) such as Sales & Use or Withholding Tax.
- There is no information available to verify wages, salaries, Federal Adjusted Gross Income, or North Carolina taxable income.
If you meet one of the requirements to request an exception, and have received a Notice of Collection, final bill, or final determination on all tax periods, you must complete form RO-1062, and provide a copy of last three (3) months bank account statements for all accounts.
- All businesses are required to attach an RO-1062 for each officer, partner or member.
- You may be asked to provide additional information such as, but not limited to:
- Loan denial documentation.
- Documents to validate information provided on the Collection Information Statement.
- Please keep in mind that this form is a request and there may be additional steps to confirm your agreement with NCDOR.
- Your account is considered open to collection activity(s) while under review.
- The Department cannot guarantee length of review period.
- You are encouraged to establish a payment agreement while your account is under review.
- If your exception request is approved, your payment agreement will be modified at that time.
As part of the agreement, the you 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 you cannot meet these requirements when the agreement is set up, or any additional requirements thereafter, the agreement will be in default. You will not be able to re-establish an agreement once it is in default. The Department may assess a 20% Collection Assistance Fee on all defaulted agreements.
- 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.
Yes. Your installment agreement may be modified or terminated if one or more of the following conditions are met:
- Information you provided in support of the agreement was inaccurate or incomplete. G.S. 105-237(b)(1).
- Collection of tax to which the agreement applies is in jeopardy. G.S. 105-237(b)(2).
- Your financial condition has changed. G.S. 105-237(b)(3).
- You fail to pay an installment when due or to pay another tax when due. G.S. 105-237(b)(4).
- You have an installment payment returned from you financial institution for insufficient funds or other reason.
- You fail to provide any information requested by the Secretary. G.S. 105-237(b)(5).