Kentucky Income Tax Installment Agreement Request

Kentucky Individual Income Tax Installment Agreement Request

GENERAL INSTRUCTIONS

If you are unable to pay the full amount due with your individual income tax return, you may request an installment agreement by completing this form and mailing it to: Division of Collections, P. O. Box 491, Frankfort, Kentucky 40602-0491. Specify the amount of the monthly payment you propose to make in the block marked “Proposed Monthly Payment Amount.” Payments should be as large as possible to lower penalty and interest charges. Requested Installment Agreements must be created by the Division of Collections after a tax notice has been issued.

You can make installment payments in three ways. Credit cards or ACH Debits will save you the time and trouble of mailing monthly payments and may help save you additional penalties, interest or fees.

• Pay by Credit Card—To charge your monthly payments to MasterCard, VISA, American Express or Discover provide the account number and other information on the form below. You must also provide the cardholder’s name and billing address exactly as it appears on the credit card billing statement. You may also arrange credit card installments by phone. For more information, call (502) 564-4921, ext. 5354. A convenience fee may apply to each monthly payment. Please indicate date for credit card payment.

• Pay by ACH Debit—To request that your monthly payments be withdrawn electronically from a bank account, enclose a voided check with the completed form below. You may also call (502) 564-4921, ext. 5354 to request this option. Please indicate date for ACH Debit payment.

• Pay by Mail—Make your checks or money orders payable to the Kentucky State Treasurer. Include the taxpayer’s full name(s), Social Security number(s), and the tax period you are paying. Mail the payments to the Division of Collections, P.O. Box 491, Frankfort, KY 40602-0491.

You will be advised if your request for an installment agreement is approved or denied. If you do not receive a response to this request within 90 days from the date you file your return, please call the Division of Collections, (502) 564-4921, ext. 5354.

DEPARTMENT OF REVENUE

KENTUCKY INDIVIDUAL INCOME TAX
INSTALLMENT AGREEMENT REQUEST

PROPOSED MONTHLY PAYMENT AMOUNT

GENERAL INFORMATION

A Kentucky taxpayer has the right to consideration of an installment agreement for the payment of delinquent taxes, interest, penalties and fees. The right to an installment agreement is provided for in KRS 131.081(9) and is primarily dependent on the taxpayer’s inability to pay the amount due in full.

Eligibility for an Installment Agreement
An installment agreement should be requested only when there is no other way of paying the liability on time and in full.

A taxpayer must clearly demonstrate an inability to pay the liability in full and the agreement must facilitate collection. Generally this means that taxpayers who have the ability to pay with available funds or borrow from a financial institution are not eligible.

Proposed Monthly Payment Amount
The monthly payment amount will be based upon the taxpayer’s ability to pay after considering the taxpayer’s monthly income and reasonable expenses. Allowable expenses generally include reasonable amounts for food, clothing, housing (and associated expenses), installment payments and other necessary living expenses. The proposed monthly payment amount should be as much as possible to minimize the length of the agreement and the accrual of interest, penalties and fees.

Interest, Penalties, Fees and Refund Offsets
The law provides for the assessment of interest, penalties and fees for tax liabilities paid after the due date. Interest accrues at the tax interest rate (6 percent for 2018). In addition, penalties of 2 percent per month may be assessed on the unpaid tax. A 25 percent Cost of Collection Fee is imposed on tax due which becomes due and payable (generally 46 days after the assessment date). Interest, penalties and fees continue to accumulate while an installment agreement is in place. Also, any money Kentucky may owe you (tax refunds, etc.) will be offset to your outstanding liability. Additionally, any federal income tax refund that may become due to you may be offset to this liability pursuant to 26 USC §6402(e).

Setting up the Agreement
Taxpayers who believe they qualify for an installment agreement should complete Form 12A200, Individual Income Tax Installment Agreement Request, and mail it to the Division of Collections, P. O. Box 491, Frankfort, Kentucky 40602-0491.

State Tax Lien
Depending on the amount and length of the agreement, a State Tax Lien may be filed. If a lien is filed, it will remain on the taxpayer’s credit record for up to seven years after the liability is paid and the lien is released.

Assistance
Questions should be directed to: Division of Collections, Kentucky Department of Revenue, P.O. Box 491, Frankfort, KY 40602-0491, (502) 564-4921, ext. 5354.