New Jersey Tax Payment Plan

New Jersey tax payment plan basics

Like many other states, New Jersey offers a tax payment plan for individuals and businesses who cannot pay their back taxes in one lump sum.

This means of tax resolution applies in two scenarios: when you cannot pay your taxes in full and when you owe reimbursement for overpayment of Anchor Benefit, Homestead Benefit or Senior Freeze benefits.

A New Jersey tax payment plan covers any unpaid balance, including:

• Cigarette taxes
• Anchor Benefit
• Homestead Benefit
• Stay NJ
• Senior Freeze

You must have filed all required tax returns before applying for this tax relief.

The minimum payment is $25, and plans generally last up to 60 months, although the state’s Division of Taxation may approve longer terms with further documentation.

How to request a New Jersey tax payment plan

Follow the steps below to request a tax payment plan.

1. Submit a request form

If you owe back taxes, the New Jersey Division of Taxation will send you a notice or bill.

The fastest way to respond is online through the New Jersey Online Notice Response Service (NJ ONRS). You can also use the Payment Plan Request Form to apply via mail.

2. Send in your application

The tax relief application requests several details, including:

• Your personal information
• The balance due
• Your requested monthly payment
• Your preferred monthly due date

You can use the Tax Lookup and Payment for Businesses and Individuals tool to check how much you owe. If an unpaid balance is not yet listed, individuals can check an additional database.

Businesses must also submit the Responsible Person Acknowledgement and Judgment Authorization Form with their application.

Your form of payment will determine where you should apply for a tax payment plan.

If you are approved for a payment plan, the Division of Taxation will notify you of the next steps.

New Jersey tax payment plan monthly payments

The minimum monthly payment for a New Jersey tax payment plan is $25, but your monthly payment may be more, depending on the terms of your specific plan. You can pay using a credit card or electronic checks.

New Jersey tax payment plan interest

All monthly payments include penalties and interest, which continue to accumulate until the debt is fully repaid. Only Anchor, Homestead, Stay NJ and Senior Freeze balances are exempt.

The interest rate is calculated as the Prime Rate plus 3%. For 2026, the total rate is 10%.

2026 New Jersey tax payment plan interest rate

New Jersey tax payment plan fees

In addition to interest, you may incur other costs, such as a referral cost recovery fee and late filing penalties.

New Jersey tax payment plan fees

Penalty abatement

It’s possible that you may qualify for tax forgiveness. This penalty abatement allows you to potentially reduce the amount of back taxes you owe. If you can show reasonable cause for failing to file your tax return or pay your tax, part or all of your penalty may be waived.

You’ll need to show proof that you experienced an undue hardship, and only certain fees and penalties may be waived.

When deciding whether to approve your request, the Division of Taxation will consider the type of tax that is delinquent, as well as your previous compliance record.

To file, you must wait until penalties have been assessed and you have received a notice. You must also file all back taxes. Then, you can send an official request for abatement to the address on your billing notice or via one of the contacts below.

You must send either the Abatement Request Form or the following to the contact on your notice or one of the contacts below.

• A written statement supporting reasonable cause for the abatement; and
• A signed declaration under penalty of perjury that is signed by the:
  • Taxpayer
  • Taxpayer representative
  • Any other party against whom penalties have been assessed or are assessable

Taxpayer representatives must also file Form M-5008-R Appointment of Taxpayer Representative.

Abatement contacts

Consequences of nonpayment

If you default on a New Jersey tax payment plan, you may be subject to debt collection and can even have a judgment filed against you.

Collection process and fees

You may be sent to collections. If a certificate of debt is issued, you will be charged a collection fee for any overdue tax, known as deficiencies, and outstanding returns, known as delinquencies.

A private collection company handles the collection of outstanding debt. The company may change from time to time, but as of 2026, the contractor is Pioneer Credit Recovery (PCR).

There are a few stages in the collection process.

1. Notice. If you fail to respond to a notice of tax deficiency or delinquency, the state will forward your account to the private collection company.
2. Review. A caseworker will be assigned to your account to review your debt, and they will mail you an initial contact letter. This will include your Schedule of Liabilities, which will list the total you currently owe for back taxes. If you do not respond, the caseworker will try to contact you by phone.
3. Court Entry. If the debt remains unresolved, a Certificate of Debt will be filed with the Clerk of the New Jersey Superior Court. It is treated the same as a Docketed Judgment adjudicated in any court of law. A fee will also apply.
4. Return. After the COD is active, the case returns to the state for collection.

If you have questions, you must contact your caseworker after one has been assigned to you.

Collections contacts

Judgments

You are at risk of having a judgment filed against you if the state files a Certificate of Debt in New Jersey Superior Court.

You will receive a certified “Notice and Demand for Payment” letter. The Division of Taxation may then issue one of the following in coordination with the License Verification Unit and the Motor Vehicle Commission:

• Bank levy
• Tax lien

If you have a judgment, contact your caseworker immediately.

To resolve a docketed judgment, you can submit full payment for outstanding debt using certified funds. You must complete the Judgment Payoff Request Form and submit it to the Judgments Unit using the directions on the form.

Judgment contacts

Set-Off/Offset programs

New Jersey also permits set-off programs, also known as offset programs. If you owe outstanding tax, New Jersey may apply any refunds, property tax relief or government benefits to your debt.

This is also common with federal tax debt and can happen at any time until your debt is paid off. In addition to debts such as traffic fines and child support, set-off programs help resolve unpaid taxes.

There are a few types of set-off programs.

Set-Off of Individual Liability (SOIL)

This program automatically withholds income and property tax relief payments. These payments are instead directed to pay off your New Jersey state taxes. They can also cover outstanding municipal and federal taxes.

Federal Offset of Individual Liability (FOIL)

This type of set-off program covers federal income tax.

If you do not respond to a FOIL bill, you will receive a Notice of Intended Federal Set-Off, giving you 60 days to resolve your debt. From there, the federal Bureau of the Fiscal Service (BFS) will be notified of your outstanding New Jersey tax debt and set-off payment request.

State reciprocal set-off

Four states  — California, Connecticut, Maryland and New York — have reciprocal agreements with New Jersey. They each agree to send taxpayer refunds to the other in the event of outstanding tax, interest and penalties.

Vendor programs

Any vendors who owe New Jersey state taxes may be subject to the state vendor set-off program or the Federal Treasury Offset Program (TOP). This will apply any refunds to outstanding tax debt until it is resolved.