IRS Code 766

What is the IRS code 766?

An IRS code of 766 on your account means that you have received a credit on your account from the IRS. The credit on your account is a reduction of your tax liability in dollars. If you have more credits than your tax liability, the overpayment will be refunded to you. If your credits do not cover the balance due, you must pay the balance.

Possible refundable credits

There are several reasons why you may have a refundable credit on your tax return. Some of the most common reasons are listed below, but credits change each year, so the list may also change.

Refundable credit (overpayment)

If you expect your income to increase in the year after you file your tax return, you can carry the overpayment forward to the next tax year. These overpayments will appear on your tax return as a credit with code designation 766.

Child tax deduction

Prior to 2021, the child tax deduction was only partially refundable. The amount that could be refunded was $1,400 per child. The rules were changed in 2021 to allow the full amount of the credit to be refunded. In addition, in 2021 the amounts of the child credit were temporarily increased to USD 3 600 for children under the age of 6 and USD 3 000 for children under the age of 18.

Earned Income Tax Credit

The Earned Income Tax Credit, or EITC, is a tax credit available to eligible taxpayers who have earned income. The credit can be as high as $6,042 for taxpayers with three or more qualifying children, making it one of the largest tax deductions. To qualify, taxpayers must meet certain income and other requirements.

Other credits

Although we have listed the most common tax deductions above, there are other tax credits that may appear on your tax return. These include the lifetime learning credit, the American opportunity tax credit, the adoption credit, the refundable credit, the dependent care credit, the savings credit and the home energy credit.

When will my tax refund arrive?
You can check the exact timing of your refund at any time on the IRS Where My Refund tool. You can expect to receive your direct deposit refund within 2-3 weeks after your refund is processed by the IRS. For paper checks mailed to a domestic address, you should receive your refund within 3-4 weeks. If you do not receive your refund check within 6 weeks, you can call the IRS and request a replacement check.

What does the date next to code 766 mean?
The date next to code 766 is the date on which your account was credited. For overpayments, this will be the due date of the previous year’s tax refund. Other credits will be credited to your account when the tax refund is processed.

We’re here to help you!

If you see a credit on your account that you did not anticipate, or if you are missing a credit that you did anticipate, then you should follow up with the IRS on your account.

Calling the IRS

You can call the IRS at 1-800-829-1040. At certain times of the year, the wait time can be long, so be prepared to wait to speak with an agent. You should be prepared to verify your identity and explain the problem. The IRS will usually ask for a written explanation of the issue before making adjustments to your account.

Contact your local IRS office

If you need immediate assistance, you can make an appointment with your local IRS office. They can often resolve the issue on the same day if you bring a written explanation of your situation and have back-up documentation to support your argument.

Contact the Taxpayer Advocate

If you have been waiting for a resolution regarding your account and have not made any progress with the IRS, you can contact the Taxpayer Advocate. The Taxpayer Advocate is a division of the IRS that works to resolve issues for taxpayers.

Contacting a tax professional

For more help, you can contact a tax professional with experience in resolving IRS issues. The professionals at Tax Shark have decades of experience dealing with the IRS.