If I am on a payment plan for taxes owed in a previous year, does the return I'm expected to receive this year consider the taxes still owed from the previous year or will this amount be automatically taken by the IRS?

[blakecrooks]

I owed taxes last year and began a payment plan, for which I'm still paying towards. I'm working towards completing my taxes this year using Turbo Tax again. It appears I will receive a return this year. Does this mean that the taxes that I paid over the past year in addition to payments made toward the past taxes are included in what Turbo Tax has calculated as my return? Or does the expected return not include past owed taxes or payment plans and therefore the expected return will automatically be taken by the IRS to apply towards the past taxes owed that I have a payment plan for?

[DoninGA · Accepted solution]

The refund shown on the 2025 tax return does Not include any payment plan payments.

If you have a 2025 tax refund and you have not satisfied the tax debt at this time, the IRS will seize the refund and apply the amount to your debt.  If there is any funds remaining after satisfying the debt the IRS will pay the remaining refund based on how you selected to receive the refund.