Massachusetts tax payment plan with DOR
In Massachusetts, this is known as a payment agreement. Through MassTaxConnect, you can set up an agreement for balances of $10,000 or less, with payment terms as long as 36 months. The Department of Revenue handles this program.
- Cap for online agreements
- $10,000 and below
- Longest online term
- 36 months
- Lowest payment
- Each month, $25 or $50
- Late payment penalty
- Each month 1%, up to 25%
Agreements come in two types, split at $10,000
Each request is sorted by DOR, based on the total you owe. In the DOR payment FAQ, one track deals with balances of $10,000 or less; a second track deals with $10,001 or more. Smaller balances, if you meet the terms, can last up to 36 months.
On the smaller track, the lowest monthly payment allowed is $25; on the larger one it is $50. What you actually pay depends on your balance and the length you ask for. Payments can be weekly, every two weeks or monthly.
- DOR suggests using electronic funds transfer from a bank account.
- Mailed checks and money orders are accepted as well.
- Cash, debit cards and credit cards cannot be used to pay an agreement.
Do I need a bill before I ask?
You do, yes. In your hands you must have either a Notice of Assessment, the first bill or a Statement of Account, the second bill. A Notice of Intent to Assess by itself is not enough, so wait for the actual assessment. Any payments you make in good faith while you wait are welcome.
Personal debts and business debts each need their own agreement. Exceptions cover sole proprietors and cases involving a responsible person. DOR must approve every plan and it does so at its discretion. DOR can keep collecting until that approval arrives.
How do I set up a payment agreement in MassTaxConnect?
Online handling is quickest for balances of $10,000 or less. With a larger balance, you talk with the DOR Collections team. They may ask for a financial statement, which is Form M-433I for individuals and Form M-433B for businesses.
- If you have not registered for MassTaxConnect yet, register with a username and password.
- Sign in, select More, then under Collection Notices choose Request a Payment Plan.
- Select your payment schedule, then connect the bank account so transfers go through automatically.
Interest and penalties while you make payments
Enforcement stops under a plan, but interest does not stop. The federal short-term rate plus four percentage points is charged on underpayments, compounded daily. The rate is set on the penalties and interest page for DOR. DOR by itself cannot waive interest.
The penalty for a late payment is 1% a month and it is capped at 25%, as set out in chapter 62C, section 33. Every missed demand for payment also adds a $30 charge from DOR. Penalties can be waived for reasonable cause, which means the delay was not the result of willful neglect.
What does DOR do when a bill is left unpaid?
A Notice of Assessment begins a 30-day clock for paying or appealing. As the DOR collections process page explains, enforcement may start once a Statement of Account has been sent and 60 days have passed since the assessment. DOR can take steps such as levying on bank accounts and wages (money taken right from an account or paycheck). Other steps include placing a lien, seizing refunds and lottery winnings and suspending your driver’s license or your professional license. DOR can also list you on the public delinquent taxpayer list and send the case to an outside collection agency.
If a payment of yours will be late, reach out to DOR first. You learn from the Notice of Payment Agreement Cancellation that the plan has ended. Payment and a request for reinstatement remain possible. If you can pay nothing at all, you can send a hardship request to the Collections team for review.
Paying the IRS and DOR at the same time
Massachusetts and the IRS keep separate payment agreements. Each agreement is arranged on its own and payment follows that agreement’s own schedule. Before you sign up for either one, work both amounts into one monthly budget.
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Do you owe the IRS as well as DOR?
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