Most people receive their tax refunds from the IRS in two or three weeks after completing the e-file process. If you file a paper return, receiving any funds you’re due can take six to eight weeks.
If it’s been longer than that and the Where’s My Refund tool isn’t helpful, you can review your IRS tax transcript for free. It looks like an accounting ledger, showing you different codes and numbers that reflect payments owed or money you owe the government.
Taxpayers typically have a settled balance with the IRS, which means their ledger shows a zero balance. If you see Code 290 on your previous returns and there’s an outstanding balance, you might owe some money.
IRS Code 290: Meaning of Code 290 on 2021/2022 Tax Returns
Code 290 on an IRS transcript refers to an additional tax assessed to your overall statement. Its presence doesn’t mean a taxpayer owes more because it can be there when the assessment is zero. If there is a specific amount present, contact the agency or wait for a letter in the mail that explains the change to the tax return.
When you download or print your IRS ledger, you’ll see five different information categories to review.
| Category Classification | Information Found in This Category Classification |
| Code | The IRS uses different codes to represent various activities that happen on your account. Code 290 says that an additional tax assessment was issued, while Code 846 indicates the issuance of a refund because the agency owed you money. |
| Transaction Explanation | You receive a brief explanation of what the three-digit code on your transaction record means. It can be a credit to your register or an expense, although the latter occurs during zero-rate balancing when issuing a refund. |
| Cycle | The IRS cycle code is an eight-digit number you can find on your tax transcript. It appears once your return posts to the agency’s master file. It lets you know if you were put into a daily or weekly batch cycle, which means you can figure out when you might receive a refund. |
| Date | This information shows when the transaction was added to the register. It includes when the tax return was filed, when different actions take place, and if additional obligations become assessed. |
| Amount | You’ll see the exact sum of the expected obligation in this column when you download your online transaction register. |
It’s important to stay calm when you see an IRS code that suggests you have an additional tax assessed. These information points are generated by the system.
In many cases, the 290 code from the IRS has a $0 figure next to it, which means you likely don’t have anything to worry about when reviewing this information.
What Does It Mean If I See Code 290?
When you see Code 290 on your IRS transaction register, it means your return is being reviewed or is undergoing processing. They’ve made a determination about your paperwork status, which means an expected refund is on its way.
If you don’t see Code 290, your return might still be on hold.
The zero-dollar assessment often means the IRS has lifted any holds from the account, indicating that you don’t need to take further action to receive your refund. You can expect it to arrive on the day indicated by the last two digits of your cycle code.
If you have a transaction code 846 on your IRS transcript, then the end of your cycle code can indicate when you’ll receive a direct deposit refund. These numbers are 01 to 05, representing Monday-Friday deposits.
Most taxpayers don’t receive notices about a $0 Code 290 assessment. The IRS balances the account by sending the refund.
What Happens If Code 971 Appears on My Transcript?
Taxpayers that see a dollar figure assigned to IRS Code 290 have been assessed an additional tax obligation from their return. You’ll see a letter sent to your address indicating why this change was necessary with Code 971.
When Code 971 appears, you’ll eventually receive a letter offering the different options you have to pay, along with an explanation of the assessment. You typically have the right to appeal the decision.
If you agree with the assessment and the additional charges indicated by Code 290, pay the amount by the letter’s indicated due date to avoid paying any interest or penalties.
When you are due a refund before the tax adjustment occurs, you might see Code 291 appear on the transcript. This message indicates that the previous amount the agency owed has been removed or reduced by the new obligation.
Those that still have a credit on the transcript from previously paid estimated payments or employer withholdings will see Code 846 appear to indicate a refund was issued.
If your refund is delayed because of processing backlogs due to the IRS not getting the world done, you might receive an interest payment from the government. This amount appears as Code 776 on the transaction register.
What Are the Most Common Mistakes Found on Tax Returns?
Tax laws in the United States are surprisingly complex, but the most common errors that taxpayers make when filing a return tend to be simple. Most of them are easily corrected by using electronic software that does the math for you.
Today’s best tax preparation software options flag common errors while prompting you to enter any missing information. This step ensures that you can find the most valuable deductions and credits allowed for your circumstances.
If you don’t want to e-file using tax preparation software, consider hiring a reputable preparer in your area. Enrolled agents and certified public accountants tend to provide the best services, but any knowledgeable professional can help your return avoid errors that can lead to Code 290’s appearance.
Here are the most common errors to avoid when filing your tax return.
1. Filing the Return Early
Although you don’t want to file your taxes too late, it’s also essential to avoid having them completed and sent to the IRS prematurely. Some forms don’t come out until February (and sometimes later), which means you might not have all the reporting documents available for an accurate return. This issue can lead to significant processing delays.
2. Missing SSNs
Each tax return should have a Social Security number on it that matches what is on the individual’s card. If you have four children that you claim as dependents with a spouse while filing jointly, the return needs six accurate SSNs.
3. Misspelled Names
The name used for each filer and any dependents must match what is printed on that person’s Social Security card to be considered valid.
4. Inaccurate Information
Most tax preparation software options allow you to scan or upload W-2 information and other documents about interest, income, wages, and dividends. If you input these figures manually, there is a risk of transposing the data. Math errors happen all the time, which can cause delays as the IRS corrects them.
5. Incorrect Filing Status
Some taxpayers choose the wrong status when filing their annual tax returns. If you are single, you cannot be married and file jointly. If more than one option applies, there is an interactive tax assistant available on the IRS website that can let you choose the best one for your specific needs.
Most tax preparation software tools will select the best filing status for you based on the refund amount you’ll receive.
6. Math Errors
Mathematic mistakes are frequent. They can be simple addition or subtraction errors or involve complicated calculations involving tax credits and deductions. It’s always a good idea to double-check your math in each section to avoid potential mistakes.
The issue that trips up most people is the consolidation process when multiple incomes must be reported on the same form. If you own a business, have a full-time job, and do a side hustle as an independent contractor, you could have a few different forms to file beyond the W-2. You’ll need to add all the amounts together for the reporting line, including any withholdings or estimated taxes you paid.
7. Figuring Deductions and Credits
Most tax deductions and credits have worksheets that you’ll need to fill out to determine if you qualify. If you do, then you’ll see how much you can place in the specific section on your return. Tax preparation software asks you specific questions to perform these calculations on your behalf, including the addition of the various worksheets the IRS wants to see.
Four credits tend to see more errors than the other possible income reducers found on the average tax return.
- Recovery Rebate Credit
- Child Tax Credit
- Child and Dependent Care Credit
- Earned Income Tax Credit
Always take the time to review where these items appear on your final return before sending the paperwork in the mail or submitting the documents through the e-file process.
8. Incorrect Bank Account Info
The IRS completes an automatic clearing house (ACH) transaction if you have Direct Deposit information submitted with your tax return. This option lets you receive your money faster than if you get a check. If the routing and account numbers are incorrect, there could be delays in receiving your funds.
9. Unsigned Documents
If you don’t sign your tax return, it isn’t a valid document. Both spouses must sign when filing jointly in most instances. Some exceptions apply for those who have family members serving in the armed forces or partners with a valid power of attorney on file. You can avoid this issue by using the e-file process and digitally signing it before sending the paperwork to the IRS.
When you sign your tax returns electronically, you’ll provide a PIN that applies to the e-filing process. It can be the same number each year, which simplifies things when using the same tax preparation software.
Additional personal information, such as your SSN, might be required to initially verify your identity.
Should I Be Worried About IRS Code 290?
IRS Code 290 isn’t a cause of worry for the average taxpayer. Most people will see a zero-dollar balance next to this transaction, indicating that any holds on the account have been released. This activity clears the way for a refund to be issued.
The IRS encourages everyone to file electronically whenever possible to avoid the common problems and mistakes that cause delays in refund processing. If you choose the direct deposit option, the money will hit your account about two to three weeks after the return is accepted and processed.
Free filing options are available for some taxpayers. Some people qualify for free preparation services from IRS-trained volunteers.
I’ve been using TurboTax from Intuit for my tax returns for more than a decade. I love how my account information is automatically populated into each year’s documents, saving me a ton of time on data entry.
The software asks me if the information is the same. Once I confirm that it is, I’ll review all the entries to ensure there aren’t errors or changes. After that step, I’m ready to start putting in my income and assets.
TurboTax takes you through each section, searching for potential deductions or credits to ensure you’re getting the most money back possible. If you file as a small business, you’ll need to check that some calculations are better than others. For example, you could take a standard home office deduction or input your actual expenses.
Between the preparation fees and the time it takes to complete the paperwork with the software, I’ve saved at least $5,000 in costs and dozens of hours in time compared to when I filled out the tax returns manually.
IRS Code 290 shouldn’t worry you. Even if there is an amount on the register, it could be due to a simple calculation error on the agency’s part. You always have the right to appeal, which is why it helps to keep copies of your records available to give things a second look.
