$1,071.54 Transferred From My $9,078.46 Tax Refund to My 2021 Return - IRS Code 826 on 2022 Transcript

I just pulled my transcript and see a refund was issued on 4/5 for $9,078.46, but there's this weird credit transfer code 826 for $1,071.54 transferred out to 1040 202112. Anyone know what this means? I received my Account Transcript from the IRS today (Response Date: 03-31-2023, Tracking Number omitted for privacy) for my 2022 tax return. Looking at all the details: ACCOUNT BALANCE: $0.00 ACCRUED INTEREST: $0.00 AS OF: Apr. 17, 2023 ACCRUED PENALTY: $0.00 AS OF: Apr. 17, 2023 ACCOUNT BALANCE PLUS ACCRUALS (this is not a payoff amount): $0.00 INFORMATION FROM THE RETURN OR AS ADJUSTED: EXEMPTIONS: 03 FILING STATUS: Head of Household ADJUSTED GROSS INCOME: $20,144.00 TAXABLE INCOME: $744.00 TAX PER RETURN: $0.00 SE TAXABLE INCOME TAXPAYER: $0.00 SE TAXABLE INCOME SPOUSE: $0.00 TOTAL SELF EMPLOYMENT TAX: $0.00 RETURN DUE DATE OR RETURN RECEIVED DATE (WHICHEVER IS LATER): Apr. 15, 2023 PROCESSING DATE: Apr. 17, 2023 TRANSACTIONS: CODE EXPLANATION OF TRANSACTION - CYCLE - DATE - AMOUNT 150 Tax return filed - 20231305 - 04-17-2023 - $0.00 806 W-2 or 1099 withholding - 04-15-2023 - -$1,177.00 766 Credit to your account - 04-15-2023 - -$2,647.00 766 Credit to your account - 04-15-2023 - -$162.00 768 Earned income credit - 04-15-2023 - -$6,164.00 826 Credit transferred out to 1040 202112 - 04-15-2023 - $1,071.54 971 Notice issued - 04-17-2023 - $0.00 846 Refund issued - 04-05-2023 - $9,078.46 I'm just confused about that credit transfer code 826. What exactly was transferred and why? It looks like it's transferring $1,071.54 to my 2021 tax return (1040 202112). Did I owe money from last year that I wasn't aware of? The IRS appears to have issued a notice (code 971) on 4/17, but I haven't received anything in the mail yet. My final refund was $9,078.46 which was issued on 4/5/2023, but I'm trying to understand if the $1,071.54 transfer was correct or if I should have received that money too.

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15 comments

Brandon Parker

•1y

Your transcript shows a total tax credit amount of $10,150, broken down as $1,177 in W-2/1099 withholding, $2,647 in Child Tax Credit, $162 in additional credits, and $6,164 in Earned Income Credit. The key transaction here is code 826, which indicates $1,071.54 was automatically transferred to cover a tax liability from tax year 2021 (shown as "1040 202112"). The final refund of $9,078.46 issued on April 5, 2023, represents your total credits ($10,150) minus the transferred amount ($1,071.54). Your transcript shows a zero balance with no penalties or interest as of April 17, 2023, indicating all accounts are current. The IRS issued a notice (code 971) explaining this transfer. Your filing status as Head of Household with 3 exemptions and an AGI of $20,144 qualified you for these substantial credits, particularly the Earned Income Credit of $6,164, which is a significant portion of your total refund. Despite having taxable income of $744, your tax liability was $0 before credits were applied. The cycle number 20231305 indicates your return was processed in the 13th week of 2023, with the final processing date of April 17, 2023.

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Louisa Ramirez

•1M

Code 826 is basically the IRS saying "hey, we're taking this money to pay off something you owed us from before." In your case, they applied $1,071.54 from your 2022 refund to cover a balance on your 2021 return. This happens automatically when you have an outstanding liability from a previous year - they'll always offset current year refunds against prior year debts before sending you the remainder. The good news is your accounts are all squared up now with zero balances!

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