[{"@context":"https:\/\/schema.org\/","@type":"Article","@id":"https:\/\/moneydoneright.com\/taxes\/personal-taxes\/irs-code-768\/#Article","mainEntityOfPage":"https:\/\/moneydoneright.com\/taxes\/personal-taxes\/irs-code-768\/","headline":"IRS Code 768: What Does It Mean on IRS Transcript?","name":"IRS Code 768: What Does It Mean on IRS Transcript?","description":"Eligible taxpayers can use earned income tax credits to reduce their tax liabilities. IRS...","datePublished":"2023-04-10","dateModified":"2023-04-10","author":{"@type":"Person","@id":"https:\/\/moneydoneright.com\/author\/logan-allec\/#Person","name":"Logan Allec, CPA","url":"https:\/\/moneydoneright.com\/author\/logan-allec\/","identifier":4,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/6e74dd0453a5871d1dcfde6d40d9494765ca8bfdb01927cefee4564d4bee9075?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/6e74dd0453a5871d1dcfde6d40d9494765ca8bfdb01927cefee4564d4bee9075?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Money Done Right","logo":{"@type":"ImageObject","@id":"https:\/\/moneydoneright.com\/wp-content\/uploads\/Money-Done-Right-Personal-Finance-and-Investing-Blog.png","url":"https:\/\/moneydoneright.com\/wp-content\/uploads\/Money-Done-Right-Personal-Finance-and-Investing-Blog.png","width":488,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/moneydoneright.com\/wp-content\/uploads\/irs-code-768.png","url":"https:\/\/moneydoneright.com\/wp-content\/uploads\/irs-code-768.png","height":460,"width":1900},"url":"https:\/\/moneydoneright.com\/taxes\/personal-taxes\/irs-code-768\/","about":["Personal Taxes"],"wordCount":1372,"articleBody":"Eligible taxpayers can use earned income tax credits to reduce their tax liabilities. IRS Code 768 is added to tax account transcripts after the IRS approves this credit.Its addition to a transcript doesn\u2019t indicate that the IRS has finished processing a tax return or when your refund will be issued, but rather that the EITC became effective on your tax account.You don\u2019t have to be a tax expert to understand Code 768 because its presence on an IRS transcript always means the same thing. We\u2019ll show you how to interpret this transaction code and what it means for your tax refund.Table of ContentsToggleWhat is Earned Income Tax Credit?PATH Act and EITCEITC and Processing DelaysAccessing Tax Account TranscriptIRS Code 768 AnalysisThe Meaning of IRS Code 768Frequently Asked QuestionsReach Out to a CPAWhat is Earned Income Tax Credit?The Earned Income Tax Credit was established in 1975 to soften the effects Social Security and Medicare taxes had on low-income families at the time.This refundable credit enables families to offset some or all of their tax liabilities and receive a refund if the credit amount exceeds their income tax debt.Taxpayers must meet the criteria below to claim this credit on their tax returns.Work legally in the United States and earn under $59,187.Generate less than $10,300 of investment income.Have a Social Security Number.Hold a US Citizenship or be a resident alien for at least a year.Not file Form 2555, Foreign Earned Income.Your filing status and the number of children you have can also affect your eligibility to claim EITC and the maximum credit amount you can receive.It\u2019s worth adding that taxpayers who don\u2019t have children and choose the Single filing status can also be eligible for this tax credit if they meet other criteria. Seeing IRS Code 768 on your tax account transcript indicates that you check all the boxes.Still, you must ensure you\u2019re eligible for this tax credit before filing a return to avoid processing complications.PATH Act and EITCThe Protecting Americans from Tax Hikes Act introduced several changes to the EITC and the Additional Child Tax Credit (ACTC).Most notably, PATH increased the EITC\u2019s phase-out threshold by $5,000 for taxpayers who chose the Married Filing Jointly filing status.Before the PATH Act was enacted, taxpayers could claim EITC retroactively, even for years when they didn\u2019t have a valid Social Security Number. Under present regulations, you can only claim EITC for the current tax year if you have a valid SSN.This act also permits the IRS to penalize taxpayers who erroneously claim this tax credit. The penalty is calculated based on the taxpayer\u2019s tax liability after removing the EITC adjustment from the return.The IRS might ban you from claiming EITC for up to ten years if you claim this credit despite not meeting all the criteria.EITC and Processing DelaysThe PATH Act prevents the IRS from issuing refunds to taxpayers who claim EITC on their returns prior to February 15. Hence, EITC can be why the processing of your return is delayed.This limit was placed with the aim of preventing tax fraud and identity theft by giving the IRS enough time to compare the information employers send on W2 forms by January 31 with the information on taxpayers\u2019 returns.The IRS often audits returns with EITC claims, which is why the processing of your tax return can be temporarily on hold.\u00a0Consequently, you might see Code 971, Code 570, or similar transaction codes on your transcript that indicate the processing of your tax return was delayed beyond the usual three-week span.You won\u2019t be required to take action if these codes appear in your tax account transcript unless the IRS sends you a notice with instructions regarding the steps you must take before they can continue processing your return.Accessing Tax Account TranscriptE-filers can easily monitor their tax return\u2019s status with the Get Transcript tool available on the IRS website.The tool gives you access to several types of tax transcripts, so you must request access to the tax account transcript if you want to see how the processing of your tax return is progressing.Unlike tax return transcripts or wage and income transcripts, tax account transcripts contain transaction codes that inform you of each action the IRS takes while processing your return.These codes appear in tax account transcripts at different processing stages. You\u2019ll only see Code 150 and a handful of others shortly after your tax return enters the Individual Master File system.Code 768 is usually added to tax account transcripts during late processing stages when the IRS approves EITC and assigns it to an account.IRS Code 768 AnalysisSection 8A \u2013 Master File Codes document offers only a brief explanation of Code 768. The remarks section next to this code reads:\u2018Posts Earned Income Credit which is generated from information received from Code and Edit.\u2019This cryptic message means little to most taxpayers as it does not explain the code\u2019s meaning.The code 768 line on a tax account transcript is slightly more informative. It has four sections that contain bits of information you can use to determine how this tax credit will affect your tax refund.Code \u2013 All tax code numbers are in this column, which makes determining if Code 768 was added to your account somewhat easier.Explanation of transaction \u2013 You\u2019ll see the \u2018Earned Income Credit\u2019 description next to Code 768.Date \u2013 This section shows you the date when EITC was assessed to your account. The date doesn\u2019t indicate when the IRS will issue your refund.Amount \u2013 The total EITC amount will appear in this section. Please note that the EITC amount isn\u2019t equal to the tax refund amount because it may be reduced by any tax liabilities you may have.The Meaning of IRS Code 768The addition of this code to your tax account transcript means two things. The IRS has approved your EITC claim and determined the amount you can receive based on your income and other parameters.Code 768 doesn\u2019t mean your tax refund is approved, and you\u2019ll have to wait for Code 846 to appear in your tax transcript to find out the tax refund amount.This code can also indicate that the IRS has completed auditing your tax return and resumed its processing. However, Code 768 cannot help you determine how long the IRS will need to approve your tax refund, provided you\u2019re eligible for one.Frequently Asked QuestionsWhat is the Earliest Date I Can Receive a Tax Refund if I Claim EITC? According to the PATH Act, the IRS must withhold all tax returns with EITC claims until February 15. So, the earliest date you can expect your tax refund to reach your bank account is February 28.  Does Code 768 Mean that the IRS Has Finished Processing My Return? This transaction code doesn\u2019t mean that the processing of your tax return is completed, so the IRS could still be weeks away from approving your tax refund after you see Code 768 on your tax account transcript.  What Happens if the IRS Denies Your EITC Claim? If the IRS denies your EITC claim, you must file Form 8862 Information to Claim Certain Credits After Disallowance with your next tax return. Also, you won\u2019t see Code 768 in your tax account transcript if the IRS determines you\u2019re not eligible for this tax credit.  Can Code 768 Have a Future Date? Code 768 can have a future date if the IRS approves your EITC claim, but the credit is still not assessed to your account.  Reach Out to a CPATaxpayers who claim Earned Income Tax Credit on their tax returns will see Code 768 on their tax transcripts if the IRS approves their claim. This transaction code doesn\u2019t guarantee you\u2019ll receive a tax refund, as the approved amount may not be sufficient to cover your tax liabilities.Call 866-8000-TAX or visit choicetaxrelief.com to speak with a CPA that can maximize your chances of getting this tax credit.Our Pick For Best Tax Relief Company\t\t\t\t\t\t\t\t\t\t\t\t\t\t.st5-50967.btn.btn-default:hover{border-color: #4db848;color: #4db848;background: #fff !important;}\t\t\t\t\t\tLearn More\t\t\t\t\t\t\tBBB Accredited: A+ Rating With 5\/5 RatingGuarantee: 30-Day Moneyback GuaranteeReasonable Fees: Lower than Industry AveragesTax Attorneys and CPAs: Decades of Combined Experience\t"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Taxes","item":"https:\/\/moneydoneright.com\/taxes\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"Personal Taxes","item":"https:\/\/moneydoneright.com\/taxes\/\/personal-taxes\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"IRS Code 768: What Does It Mean on IRS Transcript?","item":"https:\/\/moneydoneright.com\/taxes\/personal-taxes\/irs-code-768\/#breadcrumbitem"}]}]