I Owe New York State Taxation Department Taxes and Can't Pay

April 03, 2023 by Steve Banner, EA, MBA
New York Tax title on a black book

According to the information on its website, the New York State Department of Taxation and Finance handles around 28 million returns each year for more than 45 state and local taxes and fees. Just over half of these returns are for income tax, and you would think that your one solitary tax return among those 14 million might just slip through the cracks unnoticed. But obviously it didn’t; they found your accidental math error – and now you’re on the hook to pay what the Department says you owe them.

At this point, we would recommend you review the amount that the Department has quoted to make sure that you agree with their assessment and that they have not made a mistake of their own in their calculations. After all, none of us want to pay our state or the IRS a penny more than the law says we should. (If you are not sure that your stated debt is the correct amount, seeking the advice of a tax professional might be helpful!)

Even though the amount that you owe may seem quite overwhelming in terms of your ability to pay, there are some options open to you. If you can pay the full amount within 60 days, you can request a one-time extension to make the payment.

But if you can’t pay your bill in full within 60 days, the Taxation Department offers an installment plan to allow you to pay your debt in a series of monthly payments. And you can go online to make a request to set up a payment plan if 1) your agreed balance owing is $20,000 or less, and 2) you will be able to pay it off within 36 months or less.

On the other hand, if you need to request an installment payment agreement for a balance above $20,000, or for a balance that you will not be able to pay off in 36 months, your request will have to be made by phone by calling the Department at 518-457-5434 during regular business hours.

You can make your request for a one-time extension or a smaller installment payment agreement (less than $20,001 and 37 months) through your Taxation Department Online Services account, if you have one. If you don’t already have an account, you can create one here. Regardless of the size and duration of your installment agreement, this account will also provide you with the benefit of being able to review your bills and any other notices the Department sends you sooner than you would if you waited for the mail to arrive. The account will also allow you to keep track of your installment payment agreement and make sure the payments you make are received and credited to your tax debt balance.

Having instant access to this type of information will be very helpful throughout the duration of your installment payment agreement because interest and penalties will continue to be added to your unpaid balance each month until the debt is paid in full. Another advantage of monitoring your balance is that you will be able to see whether the Department has used any money that was owed to you from a state or federal tax refund to further pay down your debt.

If, however, you fail to comply with the terms of your installment payment agreement, the Taxation Department may terminate the agreement and take collection action against you to recoup the funds you owe them. These actions might include issuing a tax warrant that authorizes the department to garnish your wages or seize and sell your personal property.

I’m certain that you do not want to risk things getting to that level with your tax debt to the State of New York, and this is why I recommend that you seek the advice of the experts in Tax Debt Relief at TaxAudit. With no cost and no obligation, you can contact one of our experienced tax professionals who will help you understand your options and offer guidance on how to get your debt squared away as painlessly as possible under the circumstances.

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Steve Banner, EA, MBA
Tax Content Developer


Steve Banner began his career in the field of income tax in 1977 and has since gathered business experience in a variety of countries and cultures. In addition to the United States, he has lived and worked for extended periods in Australia, Saudi Arabia, Canada, and Sweden. Along the way he studied Adult Education and earned a Bachelor of Education, Master of Educational Administration, and MBA. He joined TaxAudit in 2016, where he is a Tax Content Developer.


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