LA State Tax Payment Plan: How to Apply for an Installment Agreement
The Louisiana Department of Revenue (LDR) may be able willing to let you make payments if you cannot afford to pay your tax liability in a lump sum. LDR offers payment plans for both individual and business taxpayers.
To help you decide if an installment agreement is right for your situation, here is an overview of the rules and the application process.
Payment Plan Terms
Individuals can request payment plans ranging from six to 36 months. If you can pay off your tax liability in less than six months, you don't need to apply for a payment plan. Taxpayers who need longer than 36 months should contact a tax professional to talk about alternative options.
The state allows businesses to request payment plans on employer withholding tax, sales and use tax, corporate income tax, corporate franchise tax, and other business taxes. The installment agreement application for businesses does not specify a time limit for payment plans.
Application Fees for LA Tax Payment Plans
The application fee for payment plans on individual income tax is $105. You don't have to pay the fee if your adjusted gross income (AGI) is less than $25,000.
If the LDR accepts your request for a payment plan, the $105 will be applied to your tax bill. If the state denies your request, you will not get the $105 back.
Businesses also must pay a $105 application fee. This amount is non-refundable and will not be applied to your tax bill.
Down payment on Louisiana Payment Plans
The state requires individuals to make a 20% down payment when they apply for a payment plan. For instance, if you owe $10,000, you should send a $2,000 down payment with your application.
The LDR encourages businesses to remit a 20% down payment, but it is not always required. If you are applying for a payment plan on LA business taxes, you may be able to get approved without making a down payment.
Who Should Apply for a Payment Plan?
If the following statements apply to your situation, you may want to apply for a payment plan on your LA back taxes:
- You agree with the tax bill.
- You cannot afford to pay the tax bill in full in the next six months.
- You can afford to make monthly payments.
- You are unlikely to qualify for other resolution options such as reducing your tax bill through an offer in compromise or innocent spouse relief.
When you apply for a payment plan, you are agreeing with the tax due. Once you apply, you lose the right to dispute the tax or ask for a refund of your payments.
What to Expect When You Have a Payment Plan in Louisiana
When you have a payment plan, your payments will be automatically debited from your bank account. Individuals must pay monthly, but businesses can make weekly, bi-weekly, or monthly payments.
While making payments, you may still receive billing notices from the LDR. Interest and penalties will continue to accrue on your account, and the state may also place a lien on your assets. The LDR will also take your federal and state tax refunds and apply them to your balance due.
The state expects you to stay compliant with filing and payment obligations. If you don't file your state tax returns or if you miss tax payments, your payment plan may go into default.
What Happens If You Miss a Payment?
If you miss a payment, your LA installment agreement will go into default. The balance will be due immediately, and the state has the right to start collection actions including wage garnishments and asset seizures.
You have 60 days to request a reinstatement of your payment plan, but there is a $60 fee.
How to Apply for a Payment Plan in Louisiana
Businesses can apply online or they can mail or email Form R-19027 (Installment Request for Business Tax) to the LDR. To apply for a payment plan over email, send the paperwork to Business.Tax@LA.GOV.
Both the individual and business applications are relatively short and straightforward. Individuals must note their contact details, tax owed, and gross wages. Businesses need to note all of their tax account numbers and the amount due for each type of tax.
To authorize direct debit, you need to include your bank account details and attach a voided check to your application. Your application will not be approved without these details.
In some cases, the LDR may want additional information about your financial situation. Make sure to respond to these requests promptly or your application may be rejected.
Get Help With Louisiana Back Taxes
If you have unfiled returns, unpaid tax liabilities, or other issues with the Louisiana Department of Revenue, a tax pro can help you. At TaxCure, we provide you a means to find local tax professionals who have experience working with the LDR, and when you search on our site, you can look at each professional's experience and ratings to ensure they meet your needs.
Don't let tax issues stress you out. Instead, get help finding the best resolution option for your situation — contact an LA tax pro today to talk about payment plans and other options for LA back taxes.