---
title: What Is the IRS Payment Plan Interest Rate? | TaxTruce
url: https://taxtruce.com/answers/irs-payment-plan-interest-rate
updated: 2026-10-29
---

# What is the IRS payment plan interest rate?

Updated October 8, 20262 sourcesTaxTruce team[Fact checked](/editorial-standards)

The short answer

Interest for individuals is 7% a year, compounded daily, for the quarter starting Oct 1, 2026. It keeps adding up until the balance is paid. The IRS sets the rate each quarter. The late payment penalty also keeps running, at 0.25% a month on an approved plan if you filed on time.

## Sources

1. [IRS: Interest rates for the fourth quarter of 2026 (IR-2026-98)](https://www.irs.gov/newsroom/interest-rates-remain-the-same-for-the-fourth-quarter-of-2026)
2. [IRS: Failure to pay penalty](https://www.irs.gov/payments/failure-to-pay-penalty)

Run the numbers with our [free tax tools](/tools), like the penalty and payment plan math.