How to Set Up a Payment Plan With California's Franchise Tax Board
What a California FTB payment plan does and who can use one
A California Franchise Tax Board (FTB) payment plan lets you pay what you owe in monthly installments instead of a lump sum. The FTB is the state agency that collects income tax. If you owe back taxes, penalties, or interest, you can request a plan that spreads the debt over time—usually 24 to 84 months, depending on how much you owe and which plan type you choose.
You do not have to wait for a bill or notice to set up a plan. You can request one as soon as you know you will owe, or after you receive a notice from the FTB. The FTB charges a setup fee (currently $225 for most plans) and a monthly payment fee (currently $1 per month for online payments, higher for other methods). These fees are added to what you owe.
A payment plan does not erase the debt or reduce the amount. It only changes how and when you pay. Interest and penalties continue to accrue on the unpaid balance until the plan is complete.
Key Takeaways
- You can request a payment plan directly from the FTB online, by phone, or by mail—you do not need to wait for a bill first.
- Monthly payments typically range from $25 to several hundred dollars depending on your total debt and the plan length you choose.
- The FTB charges a one-time setup fee of $225 and a monthly fee of $1 (for online payments) or more for other payment methods.
- If you miss a payment or fall behind, the FTB can end the plan and pursue collection action, so setting up automatic payments protects your plan.
- You can request a plan modification if your financial situation changes and you can no longer afford the monthly payment.
The two main payment plan types and how to choose between them
The FTB offers two structures: a short-term payment plan and a long-term installment agreement. The short-term plan is for debts under $10,000 and runs for up to 24 months. The long-term agreement is for debts of $10,000 or more and can run up to 84 months. The longer the plan, the smaller your monthly payment—but the more interest and penalties you pay overall.
To decide which fits your situation, calculate what you can afford each month. Divide your total debt (including the $225 setup fee) by the number of months you want to pay. If that number is too high, you need a longer plan. The FTB's online tool lets you enter your debt amount and see what monthly payments would be under different plan lengths before you commit.
If your debt is under $10,000 and you can pay it off in 24 months or less, the short-term plan costs less in total fees. If your debt is larger or your monthly budget is tight, the long-term agreement spreads the cost over more time but costs more in total interest and penalties.
How to request a payment plan online, by phone, or by mail
The fastest route is the FTB website. Go to ftb.ca.gov, find the "Payment Plans" section, and use the online request tool. You will need your Social Security number or ITIN, your tax year, and the amount you owe. The system will show you available plan options and monthly payment amounts in real time. You can set up automatic payments (ACH debit from your bank account) immediately, which also qualifies you for the $1 monthly fee instead of higher fees for checks or other methods.
If you prefer to call, the FTB's payment plan line is available during business hours. Have your Social Security number, tax year, and the amount you owe ready. The representative will walk you through plan options and can set up automatic payments over the phone. Phone setup takes longer than online but produces the same result.
You can also mail a written request to the FTB address listed on your bill or notice. Include your name, Social Security number, tax year, the amount you owe, and the monthly payment you can afford. Mail requests take 2 to 4 weeks to process, so use this method only if you cannot access the website or phone.
What happens after you request a plan and when payments begin
Once you submit your request, the FTB reviews it within 5 to 10 business days if you applied online or by phone. If you mailed a request, allow 2 to 4 weeks. During this time, collection action usually pauses, but interest and penalties continue to accrue on your balance.
If the FTB approves your plan, you will receive a confirmation letter showing your monthly payment amount, due date, and payment instructions. Your first payment is typically due 30 days after approval. If you set up automatic payments during your request, the FTB will debit your bank account on the date you chose each month.
If the FTB denies your request, the letter will explain why. Common reasons include insufficient income to support the proposed payment amount or a history of missed payments on prior agreements. You can request reconsideration by phone or mail, or you can propose a different payment amount.
How to make monthly payments and what to do if you miss one
The safest method is automatic ACH payments from your bank account. Set this up during your initial request or anytime after by logging into your FTB account online. ACH payments cost $1 per month and are deducted on the date you choose. You will receive a confirmation email each month.
You can also pay by check, money order, credit card, or debit card. Checks and money orders cost $2 per payment. Credit and debit card payments cost 2.5% of the payment amount plus a $1 fee. Online bill pay through your bank is free if your bank supports it, but confirm the FTB's mailing address with your bank first.
If you miss a payment, contact the FTB immediately. A single missed payment does not automatically end your plan, but the FTB may send a notice. If you miss two or more payments, the FTB can terminate the agreement and resume collection action, including wage garnishment or bank levies. If your financial situation changes and you cannot afford your payment, call the FTB to request a plan modification before you miss a payment. The FTB can extend your plan length or adjust your payment amount if your circumstances have changed.
When the FTB can end your plan and what happens next
The FTB will terminate your payment plan if you miss two or more payments, fail to file a required tax return while on the plan, or do not pay a new tax bill that comes due during the plan period. Termination means you are no longer on a plan and the full remaining balance becomes due immediately.
After termination, the FTB can pursue collection actions: wage garnishment (taking money directly from your paycheck), bank levies (freezing and taking money from your bank account), or a lien against your property. These actions can happen without further notice once the plan ends.
If your plan is terminated, you can request a new one, but the FTB may be less willing to approve it. To avoid termination, set up automatic payments so you never miss a due date, and file all required tax returns on time even while on the plan.
How to modify or pay off your plan early
If your income increases and you want to pay off the plan faster, you can make extra payments anytime without penalty. Send extra payments with a note stating they should be applied to your FTB payment plan account. This reduces your balance and shortens the plan length.
If your income decreases and you cannot afford your current payment, request a modification. Call the FTB or log into your online account and request a plan adjustment. The FTB will review your current financial situation and may extend the plan length or lower the monthly payment. Modifications are usually approved if you have been making payments on time and your hardship is documented.
Once your plan is complete and the full balance is paid, the FTB will send you a letter confirming the debt is satisfied. Keep this letter for your records. If you had a lien placed against your property during collection, the FTB will file a release of lien once the debt is paid.
Frequently Asked Questions
Can I get a payment plan if I owe penalties and interest, or only the original tax?
The payment plan covers the original tax, penalties, and interest all together. You cannot separate them. The entire balance—including all accrued interest and penalties—is what gets divided into monthly payments. Interest continues to accrue on the unpaid portion until the plan is complete.
What if I cannot afford even the minimum monthly payment the FTB offers?
Call the FTB and explain your situation. If you have very low income, the FTB may place your account in "currently not collectible" status, which pauses collection action temporarily. This is not a payment plan—it means you are not required to pay right now—but interest and penalties still accrue. When your financial situation improves, collection resumes.
Do I have to file my taxes every year while on a payment plan?
Yes. Failing to file a required return is grounds for the FTB to terminate your plan. Even if you do not owe tax that year, you must file on time. If you expect to owe again, you can request a new payment plan after filing.
Can I set up a payment plan for a bill I have not received yet?
Yes. If you know you will owe taxes (for example, you are self-employed and have not made estimated payments), you can request a plan before the FTB sends you a bill. This is called a "voluntary payment plan." You will need to estimate your total liability. The FTB will adjust the plan if the actual bill differs.
What if I move out of California while on a payment plan?
You must continue to pay. Moving does not end your obligation. Notify the FTB of your new address so you receive payment notices and plan updates. If you do not pay, the FTB can still pursue collection action in your new state through the federal offset program or other interstate collection methods.