Removing a State Tax Lien From Your Credit Report

Mandi Rogier
Expert Contributor
Last Updated:
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  • Undisputed, a state tax lien will typically remain on your credit report for seven years from the time it’s paid.
  • Every state handles tax liens differently, so removing one from your credit report can be difficult.
  • You must pay off your tax lien before you can begin the process of removing it from your credit report.


A tax lien is a claim that the government may file on your property if you have outstanding taxes. This gives the government first right to seize your property before other creditors can do so. A state tax lien does not guarantee that the state is going to claim your property, but it is a serious sign that you could be in financial trouble.

State tax liens are filed publicly. Credit reporting agencies follow these types of reports closely to keep your credit report up to date. Though the state does not communicate the lien directly to credit reporting agencies, you can still count on this information showing up and impacting your credit score. While there are clear steps in place to handle withdrawal of a federal tax lien, state liens are more difficult. Try these steps to get the tax lien off your credit report.

Pay the Tax Lien in Full

You cannot remove a tax lien from your credit report until it has been paid in full. This is the first and most important part of getting this item off your credit report. The state should only place a tax lien on your property if you have outstanding taxes that you’ve already failed to pay. If you see a tax lien on your credit report that is in error, contact your state’s Department of Revenue immediately to dispute the lien.

If there is a legitimate tax lien against your property, you should reach out to the state Department of Revenue to discuss payment options. If you cannot pay your outstanding back tax amount in full, you may be able to set up a payment plan that will halt further action against you. Once you’ve paid the tax amount owed in full, you can proceed with the next steps.

Removing a State Tax Lien From Your Credit Report

Review Your State’s Policies for Tax Liens

Each state handles tax liens differently. Contact the Department of Revenue in your state for more information on how you can get the lien withdrawn from your credit report. If the lien is not withdrawn by the state, it will remain on your report for seven years as a back tax that’s been “paid” or “released.” However, in many cases, you can speak with the state Department of Revenue to have the lien officially withdrawn as soon as it’s paid.

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File for a Withdrawal of the Lien

Your state Department of Revenue should direct you to the proper forms and paperwork to have the lien officially withdrawn. As you’re completing this process, it’s important to keep a copy of all documentation that you send to or receive from the state regarding your lien. These documents will prove valuable when you’re communicating with the credit reporting agencies.

Among these documents you should have paperwork regarding:

  • The original lien
  • Any payment plans that you established
  • The final payoff

Once you’ve paid the lien in full, request that your state tax office send you a paid-in-full letter. This is a critical document to have as well.

Request a Copy of Your Credit Report

If your state tax office has agreed to withdraw your tax lien, the next step is checking your credit report to see if it shows this properly. In many cases, the credit reporting agency will overlook the withdrawal, leaving the lien on your report erroneously. Ideally, you should check your credit report at least once a year to make sure all items are accurate. This may be how you find out about a tax lien if one is filed on your report in error.

There are three agencies that produce credit reports:

  • Equifax
  • Experian
  • TransUnion LLC

Check your reports with all three, as they will often differ.

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File a Dispute for Every Report That Shows the Lien

If the tax lien still appears on your credit report with any of the three agencies, you can file a dispute. You may do this by:

  • Calling the credit reporting agency
  • Mailing a letter of dispute to the agency
  • Filing a dispute online
  • Working with a company that specializes in back tax assistance

While speaking with a credit agency representative on the phone may give you immediate confirmation that the dispute was received, this doesn’t give you the paper trail that you’ll enjoy with other options. It’s typically best to choose a method that makes it easy to track your communications.

If you’re struggling with the complex process of getting a state tax lien removed from your credit report, you may want to consider working with a financial professional. Back tax assistance agencies have experts on staff who are familiar with the best way to tackle a tax lien on your credit report.

Wait for the Lien to Fall Off Your Credit Report

If the state refuses to withdraw the tax lien from your file, you may have no option but to wait for it to expire. This takes seven years from the date that the lien is paid in full. Pay off the lien as quickly as possible to start this countdown clock. If you cannot afford to pay the lien, this is another situation where a back tax assistance company may be able to help you.

If you have outstanding state back taxes, the best course of action is to explore your options before a lien is filed. It can be very difficult to get a lien removed from your credit report, but there are many ways that you can avoid the original lien entirely.

If you’re facing back taxes that you can’t afford to pay, you may qualify for an offer in compromise, which settles the amount owed for less, or a payment plan that allows you to pay the amount owed in smaller chunks over time. We at Solvable can help you decide the best way to deal with your back taxes.

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Mandi Rogier
Expert Contributor
Last Updated: