Low-income offer in compromise: the income table and what it waives
Pick Hawaii, Alaska or any other state, the household size and the gross monthly income. The calculator tells you whether the household meets the Low-Income Certification and what the minimum offer remains.
- One person, 48 states and D.C.
- $39,900
- Four people, 48 states and D.C.
- $82,500
- Each person after eight
- $14,200
- Fee and payments while under review
- $0
Minimum offer, lump sum (5 months)
$13,378
About $10,122 less than the $23,500 owed, and the household meets the Low-Income Certification (no fee, no payment with the offer).
| Equity in assets (quick-sale value, after allowances) | $8,650 |
| Future income: $394 a month × 12 | $4,728 |
| Periodic offer (6 to 24 months): × 24 | $18,106 |
| Due with a lump-sum offer: fee and 20 % | $0 |
Form 433-A (OIC) Rev. 4-2026; allowable expenses $5,906 a month (Honolulu County, Hawaii). The IRS checks every figure; an offer below this amount is usually rejected. Not tax advice.
Compiled by Radif Partners · How we calculate · rules and rates read on irs.gov · not tax advice, the IRS decides
The Low-Income Certification on Form 656 lets an individual file an offer in compromise without the $205 application fee, without the 20 % payment that normally goes with a lump-sum offer, and without monthly payments while a periodic offer is considered. You qualify if either your adjusted gross income on the latest Form 1040 or your household's gross monthly income times 12 is at or under the figure for your household size: $39,900 for one person, $54,100 for two, $82,500 for four, plus $14,200 for each person after eight in the 48 contiguous states, D.C. and the territories. Alaska and Hawaii have their own, higher columns, for example $49,875 and $45,900 for one person. The certification changes when you pay, not how much: the minimum offer is still the reasonable collection potential, and the first payment falls due 30 days after the IRS accepts. A family of three in Honolulu earning $6,300 a month qualifies; the same family in Ohio would not.
The table printed on Form 656
The figures below are the Low-Income Certification chart of Form 656, revision 4-2026. The last column turns the yearly limit for the 48 states into a monthly figure, which is the number to compare with a paycheck or a benefit statement when you use the gross monthly income route.
| Household size | 48 states, D.C., territories | Alaska | Hawaii | 48 states, per month |
|---|---|---|---|---|
| 1 | $39,900 | $49,875 | $45,900 | $3,325 |
| 2 | $54,100 | $67,625 | $62,225 | $4,508 |
| 3 | $68,300 | $85,375 | $78,550 | $5,692 |
| 4 | $82,500 | $103,125 | $94,875 | $6,875 |
| 5 | $96,700 | $120,875 | $111,200 | $8,058 |
| 6 | $110,900 | $138,625 | $127,525 | $9,242 |
| 7 | $125,100 | $156,375 | $143,850 | $10,425 |
| 8 | $139,300 | $174,125 | $160,175 | $11,608 |
| Each additional person | + $14,200 | + $17,750 | + $16,325 | + $1,183 |
A household of ten in Texas or Florida therefore has a limit of $167,700: the eight-person figure plus two additional persons. The chart counts the "family unit", and the household on Form 433-A (OIC) includes everyone who shares the costs, so the number of people should match what the financial statement shows.
Two ways to pass the test
Form 656 offers two boxes, and ticking either one is enough. The first compares the adjusted gross income from your most recently filed return with the chart. The second takes the gross monthly household income reported on Form 433-A (OIC) and multiplies it by 12. The routes can give different answers: AGI leaves out some untaxed income and is reduced by certain adjustments, while the household income on the financial statement includes non-taxable benefits and the earnings of others who contribute to the household. The IRS verifies whichever box you tick.
Three households measured
| Household | Income × 12 | Limit that applies | Certification |
|---|---|---|---|
| Three people, Honolulu County, Hawaii | $75,600 | $78,550 | met |
| Same three people in Ohio | $75,600 | $68,300 | not met |
| Couple, Anchorage, Alaska | $66,000 | $67,625 | met |
| Same couple in Oregon | $66,000 | $54,100 | not met |
The Honolulu family earning $6,300 a month owes $23,500. Its minimum lump-sum offer, with the calculator's default assets, is $13,378. Without the certification it would mail $2,881 with the application, fee and 20 % together, money the IRS keeps even if the offer fails. With it, the application goes in with no payment at all. Moving the same paycheck to Columbus, Ohio, or Portland, Oregon, puts it over the line, because the limit there is $68,300 for three.
Does your household meet the certification?
Minimum offer, lump sum (5 months)
$8,818
| Equity in assets (quick-sale value, after allowances) | $8,650 |
| Future income: $14 a month × 12 | $168 |
| Periodic offer (6 to 24 months): × 24 | $8,986 |
| Due with a lump-sum offer: fee and 20 % | $0 |
Claiming it on the application
The certification is a box in Section 1 of Form 656, next to the chart, and nothing else has to be filed to claim it. An individual can build the whole offer in the IRS Individual Online Account, which prepares the forms and computes a possible offer; a paper offer goes to the Centralized Offer in Compromise Unit in Memphis or Brookhaven, depending on the state, with Form 433-A (OIC) and its attachments: recent pay stubs, three months of bank statements, loan statements. A spouse with separate debts files a separate Form 656, and each of those forms carries its own fee and payment unless the certification is met. Keep a copy: the IRS may write back for documents, and an unanswered request gets the offer returned without appeal rights.
What the certification does not change
The offer amount is the same arithmetic as for anyone else: equity in assets plus remaining monthly income times 12 or 24, as worked through on the reasonable collection potential page. A low income often means a small remaining income, but a paid-off car, a retirement account or home equity can still push the minimum close to the balance. The certification also does not speed up the review, stop interest, or prevent the IRS from filing a lien.
A few limits come from the booklet. Only individuals qualify, including a sole proprietor for debts of the business they own personally; a corporation, a partnership, an LLC filing as a business and the estate of a deceased person do not. If you qualify but send money anyway, the payment is applied to the debt and not returned. Once the offer is accepted, the first payment is due 30 calendar days later unless an amended offer sets another date, and the usual 5-year filing and payment conditions apply.
The same idea in payment plans
Payment plans have a separate low-income rule, based on adjusted gross income at or under 250 % of the federal poverty level: the set-up fee is $0 with direct debit and $43 otherwise, reimbursable in some cases (see payment plan fees). The two tests are written separately by the IRS and a household can meet one without the other. In both cases the IRS checks the claim against its records and has the last word; this page applies the published tables and is not tax advice.