If you have an iPhone that is being paid for can you trade it in?

You will have to clear the balance with AT&T first. You must wholly own the device to trade it in, and if you have payments yet to be made, then that device is legally not yours to trade in yet.

Your agreement with AT&T has nothing to do with Apple, so AT&T will want their full owed amount paid, no matter what you do with the device. If you trade it in with a balance owed, AT&T may block activation on your account with your existing cellular telephone number.

Yes, you can do the trade-in if the device is fully paid.