Whether you are paying in full or using a payment plan, It is very important to stay on top of your payment due dates to to the IRS to avoid any late fees. The IRS's short-term payment plan gives taxpayers up to 180 days to settle their debt. It does carry a failure-to-pay penalty of 0.5% a month, and interest will accrue on what you owe until the balance reaches 25% of the total due. Regarding the state of New Jersey, if tax due is paid late, penalty and interest charges may be assessed. In some instances, they may also impose collection fees. They charge interest for every month (or part of a month) your tax remains unpaid. The rate is calculated as: Prime Rate + 3%, compounded annually. At the end of each calendar year, any tax, penalties, and interest remaining due will become part of the balance on which interest is charged. In addition to interest, they may also charge a Late Payment Penalty of 5% of the tax due.