If you owe Maryland state taxes and can’t pay the full amount at once, you can request a Maryland state tax payment plan through the Comptroller’s office and pay the balance in monthly installments. For individual income tax, the request goes through an online portal tied to your assessment notice. For business tax debts, you contact the Collections section directly. A plan doesn’t stop interest and penalties from accruing, but it generally holds off liens, bank levies, and wage garnishments while you pay the debt down.
Who Can Use the Individual Payment Portal
The Comptroller’s online payment agreement tool is built for Maryland personal income tax liabilities.1Comptroller of Maryland. Individual Payment Agreement You have to have received a bill or assessment notice from the Comptroller’s office first. That notice establishes the amount and provides the notice number you’ll enter to set the plan up.
Businesses that owe sales tax, withholding tax, or another business liability don’t use the individual portal. Contact the Business Collections Section to discuss arrangements.2Comptroller of Maryland. Tax Guidance – Setting Up a Payment Plan Sole proprietors reporting business income on a personal return generally use the individual process, since the liability flows through personal income tax.
File your return on time even if you can’t pay. The Comptroller will process it and send a notice for the remaining balance, and that notice is the starting point for a payment arrangement.3Comptroller of Maryland. Tax Guidance – Payment Methods
What to Gather Before You Apply
The most important item is your 13-digit notice number, printed on the tax bill under “Notice No.” It links the plan request to the correct debt.4Comptroller of Maryland. Online Payment – Help If you can’t find the bill, call the Collections Section at 410-974-2432 or toll-free at 1-888-674-0016.1Comptroller of Maryland. Individual Payment Agreement
You’ll also need your Social Security number and the routing and account numbers for the bank account that will fund automated payments. If you plan to ask for terms longer than the standard window, be ready to disclose monthly income, living expenses, and your broader financial picture so the Comptroller can judge whether your proposed monthly amount is realistic.
How to Submit the Request
Online
The quickest route is the Individual Payment Agreement portal. Log into the Individual Online Service Center, register if you don’t have an account, then enter the 13-digit notice number to pull up the debt and propose a monthly amount and schedule.1Comptroller of Maryland. Individual Payment Agreement You’ll get an electronic confirmation after submitting.
By Mail or Through the Service Portal
If online doesn’t work for you, the Comptroller offers an alternative through its service portal, and you can also print and mail a request to the Revenue Administration Division in Annapolis. Paper submissions take longer because they’re reviewed by hand, and the response comes by mail.
Through a Representative
You can authorize a tax professional or attorney to handle this for you by filing Maryland Form 548, the Power of Attorney. It covers signing agreements, receiving confidential tax information, and managing the arrangement.5Comptroller of Maryland. Maryland Form 548 Power of Attorney
Plan Length and Payment Terms
Short-term plans of six months or less are the easiest to get approved. The Comptroller generally won’t file a tax lien against you on a short-term arrangement.2Comptroller of Maryland. Tax Guidance – Setting Up a Payment Plan Anything longer than six months has to be reviewed and approved by a supervisor in Collections, which means closer scrutiny of your finances and a longer approval timeline.
Payments typically run through automated bank debits on an agreed date each month. Throughout the plan, you have to keep filing all future Maryland returns on time and pay any new liabilities in full. Falling behind on current-year obligations can void the agreement.
Interest and Penalties Keep Running
A payment plan doesn’t freeze the balance. Interest accrues every month on what remains unpaid until the debt is gone. The Comptroller sets the annual interest rate each year by October 1, and the monthly charge is one-twelfth of that annual rate.6Maryland General Assembly. Maryland Code Tax-General 13-604 – Interest Rates The rate changes year to year, so total interest depends on both the plan’s length and the prevailing rate.
Late-payment penalties can reach up to 25 percent of the tax owed.7Comptroller of Maryland. Tax Guidance – Penalty and Interest Charges They’re assessed when a balance goes unpaid past the due date, and a plan doesn’t undo them. The total you pay under a plan will be meaningfully more than the original bill, and shorter plans cost less because less interest piles up.
What a Plan Does and Doesn’t Stop
One of the main reasons to set up a plan is to keep the Comptroller from escalating. Ignore an assessment for 30 days without responding and the office can begin legal action, including property liens, bank account attachments, and wage garnishment.7Comptroller of Maryland. Tax Guidance – Penalty and Interest Charges An approved plan generally holds those actions back, and short-term plans of six months or less typically avoid liens entirely.2Comptroller of Maryland. Tax Guidance – Setting Up a Payment Plan
Refund offsets are the exception. If the state owes you money, whether a tax refund or another disbursement, the Comptroller can apply it to your outstanding balance even while your plan is active. The offset doesn’t change your monthly amount; it just brings the balance down faster.2Comptroller of Maryland. Tax Guidance – Setting Up a Payment Plan Don’t count on receiving a state refund while you have an outstanding tax debt.
What Happens If You Default
Missing a scheduled payment or failing to file a current-year return on time can void the agreement. Once it’s cancelled, the full remaining balance becomes due immediately and the Comptroller can resume collection without further negotiation. Liens, bank levies, and wage garnishment are all back on the table.
If you know you’re going to miss a payment, call Collections before the due date rather than after. The office has more flexibility to renegotiate when you reach out first. Letting a plan lapse silently is the worst outcome, because it weakens your position for any future arrangement.
If a Payment Plan Won’t Work: Offer in Compromise
When you genuinely cannot pay the full amount now or in the foreseeable future, Maryland’s Offer in Compromise program lets you propose settling the debt for less than the total. The bar is high, and the Comptroller is explicit that not wanting to pay doesn’t qualify.8Comptroller of Maryland. Offer in Compromise
To be eligible, all of the following must apply:
- The tax has been formally assessed as a delinquent liability.
- You’ve exhausted or declined all administrative appeals.
- At least two years have passed since you became liable for the tax.
- Every required return has been filed with the Comptroller.
- You are not in an active bankruptcy proceeding.
- If the debt involves a business, the business is closed.
- You can show you lack the resources to pay in full now or in the foreseeable future.
The application uses Maryland Form 656 along with financial statement Form MD 433-A documenting assets, income, and expenses. If your offer is accepted, you have to stay compliant for three years, filing and paying on time. Fail during that window and the Comptroller can treat the offer as defaulted and reinstate the original unpaid balance.9Comptroller of Maryland. Maryland Form 656 Offer in Compromise
Check the Assessment Before You Commit
Before signing on to monthly payments, make sure the amount is right. If you believe the Comptroller has calculated your liability incorrectly, you have 30 days from the date the assessment notice was mailed to file an appeal and request a hearing.7Comptroller of Maryland. Tax Guidance – Penalty and Interest Charges Under Maryland law the assessment is presumed correct, so the burden is on you to show otherwise. Once the 30-day window closes without an appeal, collection procedures begin and the amount is locked in. If you want to dispute part of the bill and still need a plan, file the appeal within the deadline and discuss payment terms for the portion you don’t dispute.