Who the IRS considers for relief payments in 2025

The IRS does not have a single "relief payment" program that works the same way for everyone. Instead, relief comes through several different routes depending on your tax situation, income, and what you owe. Some relief is automatic once you file; some requires you to request it; some depends on changes Congress makes to tax law during the year.

The most common forms of IRS relief in 2025 are refundable tax credits (money the IRS sends you if your credits exceed what you owe), payment plans (if you cannot pay your full tax bill at once), and hardship relief (if you cannot pay and face serious consequences like wage garnishment or bank levy). A smaller number of people may receive relief through offer in compromise, which lets you settle a tax debt for less than you owe, but this is harder to get and requires proof of genuine financial hardship.

Key Takeaways

  • Refundable tax credits like the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) send money directly to your bank account or by check if you owe no tax or less tax than the credit amount.
  • If you owe taxes and cannot pay in full, the IRS offers payment plans (installment agreements) that let you pay over time without triggering collection action.
  • Currently Not Collectible status pauses IRS collection efforts if you face genuine hardship, though interest and penalties continue to accrue on what you owe.
  • Offer in compromise allows you to settle a tax debt for less than the full amount, but requires detailed financial documentation and proof that paying in full is not realistic.
  • You must file a tax return to receive any relief — the IRS cannot send you money or set up a plan without a return on file.

Refundable tax credits that put money in your account

A refundable tax credit is money the IRS sends you if the credit is larger than the tax you owe. The most common are the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). If you earned income below certain thresholds and have dependent children, you may receive thousands of dollars in a refund even if no tax was withheld from your pay.

The EITC ranges from a few hundred to over $3,000 depending on your income and family size. The CTC provides up to $2,000 per child under age 17. Both require you to file a tax return — the IRS will not send the money without one. If you did not file in prior years, you may still be able to claim these credits by filing amended returns, though there are time limits (generally three years back).

To receive these credits, you must have earned income (wages, self-employment income, or certain other sources) and meet income limits that vary by year and filing status. The IRS website and free tax preparation services like VITA (Volunteer Income Tax Assistance) can tell you whether you likely may have access to before you file.

Payment plans if you owe taxes and cannot pay in full

If you owe federal income tax and do not have the money to pay by the deadline, you can set up an installment agreement with the IRS. This is a formal payment plan that lets you pay what you owe in monthly installments instead of a lump sum. Setting up a plan stops the IRS from taking collection action like wage garnishment or bank levy while you are making payments on time.

The IRS offers two main types of installment agreements. A short-term agreement is for balances under $10,000 and typically lasts 120 days or fewer with no setup fee. A long-term agreement is for larger balances and can last several years; you pay a setup fee (usually $31 to $225 depending on how you pay) and a monthly fee. You can request a plan online through IRS.gov, by phone at 1-800-829-1040, or by mail using Form 9465.

Interest and penalties continue to accrue while you are on a payment plan, so the longer the plan, the more you ultimately pay. If you miss a payment, the IRS can terminate the agreement and resume collection action. The IRS will work with you to modify the plan if your circumstances change, but you must contact them — they will not automatically adjust it.

Currently Not Collectible status during genuine hardship

Currently Not Collectible (CNC) status is a temporary pause on IRS collection efforts if you face serious financial hardship and cannot pay anything toward your tax debt right now. While on CNC status, the IRS will not garnish your wages, levy your bank account, or place a lien on your property. However, interest and penalties continue to accrue, and the debt does not go away.

To request CNC status, you must provide the IRS with detailed information about your income, expenses, and assets using Form 433-F (for individuals) or Form 433-A (if you have more complex finances). You can submit this by mail, in person at an IRS office, or through a payment arrangement request online. The IRS will review your situation and decide whether you truly cannot pay.

CNC status is not permanent. The IRS reviews your case every two years and may end the status if your financial situation improves. Once CNC ends, collection efforts resume. The statute of limitations for the IRS to collect (generally 10 years from the date of assessment) continues to run while you are on CNC status, so eventually the debt may expire if you remain unable to pay.

Offer in compromise to settle for less than you owe

An offer in compromise (OIC) allows you to settle a federal tax debt for less than the full amount owed. The IRS will consider an OIC only if you can show that paying the full amount is not realistic given your income, expenses, and assets. This is a formal process that requires detailed financial documentation and proof of genuine hardship.

To apply, you submit Form 656 (Offer in Compromise) along with Form 433-A or 433-F (financial statement) and a proposed settlement amount. The IRS will not consider an OIC if you are currently in bankruptcy, if you have not filed all required tax returns, or if you are not current on estimated tax payments for the current year. The application fee is $225 (though it may be waived if your income is below certain thresholds).

The IRS takes several months to review an OIC. During that time, most collection efforts are paused, but interest and penalties continue to accrue on the original debt. If the IRS accepts your offer, you pay the settlement amount and the debt is considered satisfied. If they reject it, you can appeal or reapply if your circumstances change. Most OIC applications are rejected, so this route works best when you have professional tax help.

Innocent spouse relief if your spouse or ex-spouse owes

If you filed a joint tax return and your spouse or ex-spouse did not report income, claimed false deductions, or made other errors that resulted in a tax debt, you may be able to request innocent spouse relief. This removes your liability for the tax owed, though it does not eliminate the debt itself — it just shifts responsibility to the other person.

There are three types of innocent spouse relief. Innocent spouse relief applies if you did not know about the error and had no reason to know. Separation of liability relief applies if you are divorced, legally separated, or have not lived with your spouse for the past 12 months. Equitable relief is a catch-all for situations that do not fit the other two but where holding you liable would be unfair.

You must request relief using Form 8857 within two years of the IRS first attempting to collect from you. The IRS will investigate your claim and decide whether you may have access to. If approved, you are no longer responsible for that portion of the tax debt. If denied, you can appeal to the IRS Office of Appeals or pursue other remedies.

How to request relief and what documents you need

The first step is always to file a complete and accurate tax return if you have not already. The IRS cannot process any relief request without a return on file. If you owe back taxes from prior years, you should file those returns as well, even if you cannot pay — filing stops certain penalties from accruing and opens the door to relief options.

For refundable credits, you file your return through a tax professional, a free VITA site, or tax software. For payment plans, you can request one online at IRS.gov, by phone, or by mail. For hardship relief (CNC or OIC), you submit a financial statement along with your request. For innocent spouse relief, you file Form 8857. Each route has different documents and timelines, so the IRS website or a tax professional can walk you through the specific steps for your situation.

If you cannot afford a tax professional, VITA sites offer free tax preparation and can help you understand which relief options you might pursue. The IRS also has a Taxpayer Advocate Service that can help if you are facing serious hardship or if the IRS is not responding to your requests.

Frequently Asked Questions

Do I have to file a tax return to get IRS relief?

Yes. The IRS cannot send you refundable credits, set up a payment plan, or consider hardship relief without a return on file. If you have not filed in years, start by filing the most recent year's return. You can file prior years' returns later, and you may still be able to claim credits from those years.

What if I owe back taxes from multiple years?

You can set up a single installment agreement that covers all years, or request CNC status for all of them at once. File all unfiled returns first, then contact the IRS with your relief request. The IRS will combine all balances into one plan.

Can I get relief if I am self-employed?

Yes. Self-employed people can claim the EITC if income is low enough, set up payment plans, request CNC status, or apply for an OIC. You must file a complete return showing your self-employment income and expenses. Self-employment tax (Social Security and Medicare) is part of what you owe and is included in any relief plan.

How long does it take to get approved for relief?

Refundable credits are processed when you file your return — typically within 21 days if you file electronically. Payment plans can be set up immediately online. CNC status and OIC applications take several months to review. Innocent spouse relief can take six months to a year or longer if you appeal.

What happens if I do not pay my installment agreement on time?

The IRS can terminate the agreement and resume collection action. Contact the IRS immediately if you cannot make a payment — they can modify the plan, temporarily pause it, or move you to CNC status if you face genuine hardship. Ignoring a missed payment makes the situation worse.