Payment Plans on Texas Back Taxes

Texas payment plan

If you owe back taxes in Texas, you may be able to qualify for a payment plan to pay off your tax bill in installments over time. Unfortunately, the Comptroller's office doesn't publish clear guidelines on the payment plans it offers. Instead, it considers payment plans on a case-by-case basis. Here's what you need to know.

How to Apply for a Tax Payment Plan in Texas

To apply for a tax payment plan, you must contact the local Comptroller's field office in your area. There is no standard application, and the field office may ask for a variety of information.

Typically, you have to prove that paying the tax in full would be an undue hardship on you. You may also need to demonstrate a commitment to avoid getting behind on your taxes in the future. 

Penalties and Interest on Payment Plans

In Texas, interest begins accruing on taxes the 61st day after they are due. Interest will continue to accrue on your account if you set up a payment plan. The Comptroller's office adjusts the rate annually, and it is the prime rate plus one percent.

You may also face penalties. Penalties can be up to 20% of your tax bill. A 10% penalty applies when your taxes are over 30 days late, and an additional 10% penalty applies after the date noted on the Notice of Tax/FEE Due letter. However, you may request a penalty waiver to get the penalties removed from your account.

Collection Activity When You Have a Payment Plan

Even if you set up a payment plan, the Comptroller's office may continue collection actions on your account. You will continue to receive notices about your delinquent taxes, and the state may also place a lien on your assets until you have paid the tax, interest, and penalties in full.

Additionally, state warrants will be placed on hold, meaning that you cannot receive any payments from the state until you have paid off your state taxes in full.


Payment Plans for Delinquent Property Tax in Texas

You may be able to make payments on delinquent property taxes bills over 36 months, but the decision is up to your local taxing authority. They are only required to provide this option on residence homesteads.

Alternatively, the following people are allowed to pay their property tax bills in four installments:

  • Disabled individuals
  • People age 65 and older
  • Disabled veterans or their unmarried surviving spouses
  • Partially disabled veterans with homes donated by charitable organizations and their unmarried surviving spouses
  • Individuals or business owners of properties in disaster areas that the disaster has damaged.

You must make your first installment payment before the delinquency date, and if your delinquency date is February 1, you should make your remaining payments by April 1, June 1, and August 1. If you have a different delinquency date, your payments are due two, four, and six months after that date.

Before signing an installment agreement, be aware that your signature means that you agree with the taxes. If you want to protest your property taxes, you should not sign this agreement.

Get Help Setting Up a Tax Payment Plan in Texas

Texas has relatively vague procedures about applying for and setting up payment plans on back taxes. For best results, you should work with a professional who has experience in Texas. To get help, reach out to a Texas tax pro today.

Disclaimer:  The content on this website is for educational purposes only. It does not serve as legal or tax advice. For specific help regarding your tax situation, contact a licensed tax professional or tax attorney.

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