One of the most underrated tax documents is your IRS tax transcript. Especially when you are anxiously awaiting the status of your tax refund and the official WMR/IRS2Go refund status tools are not telling you much.
But reading your IRS transcript can be a bit tricky and the details and codes can be hard to follow. So based on a video I posted on this topic and viewer feedback, here is an accompanying written summary, with a couple of examples, to help decipher the key parts on your account transcript.
As you will see some of the information on your transcript is insightful when it comes to your tax refund, while other data points or dates are just informational or irrelevant. The key is to know the difference.
Note: You will need your free IRS transcript and your WMR/IRS2Go (plus see our unofficial IRS refund schedule guideline), to get specific details around your return processing and refund direct deposit or check payment dates.
Example 1 – So what do all these highlighted transcript items mean?
Below are highlighted parts of a real transcript (condensed for clarity) and explanations of the tax transcript transaction codes (TC) to help you interpret what to look for when it comes to tax return and refund processing.
Teal (top item, -$9,109) = This is your estimated or actual NET refund amount for the current tax year. This will be a negative number because from the IRS’ perspective this is what they owe you. A refund in their eyes is a tax over payment. You can see the calculation of this in your individual line items that make up this amount in the detailed section of your transcript (other highlighted colors)
Unless something else comes up you should get paid this amount and see it reflected via Code 846, when your refund is issued.
Red (As of: Dec. 20, 2021) = This is the as of date and means absolutely NOTHING and will change during processing. It is likely a system generated date from one of the many programs and systems that the IRS uses for refund processing and is passed to the IRS master file (which determines your batch cycle)
Yellow CODE 766 (-$3,000): Your refundable credits. These are items like stimulus checks (RRC) and Child Tax Credit (CTC). If these were paid in advance, the advance payments would be noted as offsetting transactions.
Yellow Code 768 (-$4,290): Earned Income Tax Credit (EITC) amount you will be getting via refund payment. The ACTC and EITC are subject PATH HOLD, even if processed, and will be paid from mid to late February.
The good news however, is that many more childless workers and households are eligible for EITC payments over this tax year.
Blue Code 150 ($413): This is the amount of your TAX liability with the IRS based on the return you field. $0 means no liability!
Purple Code 806 (-$2,232) This is all of your Federal pay check withholdings you had. If negative it means you withheld too much in taxes and will get this back via your refund payment (essentially you made a free loan to the IRS)
Add the 3 purple $$$ lines (you might only have 1 2 or all 3 lines) and subtract your tax liability (blue highlight) = YOUR TAX REFUND
Note – as you can see in the image, once you get Code 846, it means your refund has been issued. This will change the status in WMR/IRS2Go to Refund Sent and is the code you want to see.
Hope the above explanation helps you. You can see other potential Tax processing codes that could help you determine what is happening with your tax filing and refund payment.
Example 2 – What are the Processing Dates on My Transcript?
Could someone explain my transcript to me or what do the processing dates mean, is a common questions I also get.
You can see this below for a transcript submitted by a reader, where they had no idea to interpret their transcript. Also provided on the transcript is a dissection of what it means and how to read the various dates and codes.
I covered many of the items in the earlier example, but the one difference is the processing date. You can see the Feb 13th, 2023 date.
This date basically ties back to your IRS cycle code, and is the estimated date of next IRS processing, which will also result in an another update to your transcript.
However you need to realize that the processing date is not your refund payment date. That will be signified by code 846.
If the IRS completes processing your return by the “processing date” then it may also end up being your refund date (on line 846), but this is not always the case.
What About Codes 570, 898 and 971?
Several readers have asked me about transcript transaction codes around IRS adjustments or offsets that reduced or delayed their refund payments.
These are generally denoted via TC 570 and TC 898 on your IRS account transcript. You can see a detailed article on these here, but suffice to say when you see these codes along with TC 971, it means the IRS has had to do additional processing or reviews of your tax return, which could invariable reduce or delay your refund payment.