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Installment Payment Agreements

Important: Please do NOT request an Installment Payment Agreement until you receive official correspondence from the Department. You can make payments anytime, by using the D-400V application, but you must wait to receive an official notice from the Department before you request an Installment Payment Agreement.

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 has been sent. Upon receipt of a notice, the taxpayer should immediately request an Installment Payment Agreement to avoid forced collection action.

Common Questions

What are the payment parameters?

Once a taxpayer receives a notice, they may request a payment agreement based on the following parameters:

Tax Type Balance Due Period
Individual Income Less than $1,000 15 months
Individual Income $1,000 to $6,999 30 months
Individual Income $7,000 to $49,999 40 months
Individual Income $50,000 or more 50 months
Business Any amount 12 months

Request an Installment Payment Agreement

 

What if I can’t meet the parameters?

If a taxpayer believes that they cannot make payments according to the parameters shown above, the taxpayer may submit more information for the Department to review. Collection Information Statements help the Department determine if a taxpayer should be able to meet the parameters.

Please mail this information to the taxpayer's local service center marked Attn: Collections.

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.

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.
  • Have a bank account: The taxpayer must list a checking or savings account on the installment payment agreement request form.
  • Allow bank drafts: The taxpayer must allow the Department to draft the scheduled payment from the taxpayer's bank account. Failure to make a scheduled payment, or if a payment is returned to the Department from the taxpayer's bank or financial institution, the agreement will be in default.
  • 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