Installment Payment Agreements
If you are not able to pay in full, you may be eligible for an installment payment agreement.
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Who can request an installment payment agreement?
You can set up an installment payment agreement based on the following parameters:
|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||Less than $7,000||6 months|
Businesses with a balance due of more than $7,000 are not eligible for an installment payment agreement.
While your installment payment agreement may cover multiple periods, you cannot add additional periods once an installment payment agreement has been established.
What are the requirements?
There are several requirements for you and the Department. Please review these requirements carefully before you make your request.
As part of the agreement, you must:
- File and pay all returns in full: You must continue to file and pay all returns in full during the term of your installment payment agreement.
- Have a bank account: You must list a checking or savings account on your installment payment agreement request form.
- Allow bank drafts: You must allow us to draft the scheduled payment from your bank account. If you cannot make a scheduled payment or a payment is returned to us from your bank or financial institution, your agreement will be in default.
- File and pay estimated income taxes: You must remain current in paying estimated income taxes, and enter the correct filing status and number of allowable exemptions on your NC-4s.
- Provide additional information, as needed: You must provide us with any additional information as it is requested. We may perform periodic reviews of your financial condition during the term of the agreement to assess continued need as well as possible jeopardy of collection.
If you cannot meet these requirements, or any additional requirements established when you set up the agreement, your agreement will be in default. You 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: We will not seize or levy any property during the term of the agreement unless the agreement goes into default or we determine collection of the tax is in jeopardy.
- Will not assess the collection assistance fee: Unless it has already been assessed, we will not assess the 20% collection assistance fee (G.S. 105-243.1(d)) during the term of the agreement. If the collection assistance fee has already been assessed, it will be built into the balance due for the installment payment agreement.
- Will offset refunds and lottery winnings: During the term of your agreement, we are required to offset any state or federal tax refunds and NC Education Lottery winnings. These will be applied to your debt and do not count as a scheduled payment.
- Will provide written notification: We will provide 30-days written notification if the terms of the agreement change because of an improved financial condition.
- May issue a Certificate of Tax Liability: We 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 your credit report. If you have concerns about the CTL, please contact the agent handling your case before establishing the agreement.
- Will take legal action if you default: We must take legal action to force collection of the tax immediately and without notice if you default on any of the terms of the agreement. A CTL may be issued and refunds and lottery winnings offset even if the agreement is not in default.
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