Every year millions of taxpayers are left wondering when they might receive their tax refunds. Still, the account transcript offers clues you can use to determine the approximate date when the refund should reach your account.
The IRS cycle code is a vital clue indicating how often the tax transcript is updated. This eight-digit code is added to an account transcript after a tax return is uploaded to the Individual Master File, a system the IRS uses to store and process filed tax returns.
Nonetheless, the code alone cannot give you the information you need to determine how much more you must wait for your tax refund. So let’s look at the IRS code and how it can help you determine when you’ll receive your refund.
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Types of IRS Processing Accounts
The information about individual tax returns is either updated on a daily or weekly basis.
Most taxpayers are assigned a daily account, meaning their tax returns are processed Friday through Wednesday. These accounts have cycle codes that end with 01, 02, 03, or 04 and usually receive refund updates on Wednesdays.
Accounts are moved from daily to weekly processing regimens due to the following reasons:
- Taxpayer’s criminal record
- Suspicion of identity theft
- Bankruptcy
- Foreign address
Weekly processing accounts have cycle codes that end with 05. They’re processed on Thursdays and updated on Saturday mornings.
The IRS uses these accounts to create time to acquire additional taxpayer documentation and verify their validity. Once the issue is cleared, the IRS moves an account from weekly to daily processing.
What is a Tax Account Transcript, and How to Access It?
Creating an online account will enable you to make payments, check your tax balance, and give you an overview of tax records.
Most importantly, it will unlock access to the Get Records section of the IRS website. The section features several account transcript types, including the Wage and Income transcript or Return transcript.
The Tax Account Transcript contains essential information about your tax return, such as the taxable income or the filing status. It also features different codes that reflect the tax return’s current status.
Taxpayers can access this transcript from their IRS accounts by simply navigating to the Get Transcripts section of the website. It’s also possible to obtain this paper version of this transcript via the post.
Once you create an IRS account, you can access tax account transcripts for the last nine fiscal years.
Analyzing the IRS Cycle Code
The key reason we’re mentioning account tax transcripts is that they contain IRS cycle codes. This code indicates the date when a tax return was uploaded to the Individual Master File system. It follows a year, week of the year, and day of week structure.
Hence, it consists of three parts. The first part has four digits and shows the current calendar year. So, all tax returns filled in 2023 will start with this number.
The second part has two digits that indicate the week of the ongoing year when the tax return was entered into the IMF system.
The IRS doesn’t include months in cycle codes, so if the second part of your cycle code is 06, it means that the processing of your tax return started in the second week of February.
The final section of the IRS cycle code refers to the day of the week when a tax return was added to the Master File. As we already noted, accounts are processed and updated daily or weekly.
The daily processing begins on Friday and ends on Wednesday.
- Friday – 01
- Monday – 02
- Tuesday – 03
- Wednesday – 04
Daily account tax transcripts are updated on Tuesdays, while their Where’s My Refund statuses are updated on Wednesdays.
Weekly accounts have cycle codes that end with 05. They’re updated on Fridays and Saturdays.
Locating the IRS Cycle Code in the Tax Account Transcript
The IRS cycle code is located at the top of the tax account transcript under the cycle section.
So, all you need to do to find out your tax return’s cycle code is go to the Get Transcripts section of the IRS website, click View Tax Records, and hit the Get Transcript Online button.
You’ll be asked to provide a reason why you need a transcript before you can proceed to view the account transcript.
Next to the cycle code, you’ll see the IRS Processing Date that tells you when your tax return should be processed and approved. The date is automatically generated, and by default, it is three weeks after the cycle code date.
It’s important to remember that IRS cycle codes and processing dates can change if the IRS needs more than three weeks to issue a tax refund.
Can IRS Cycle Code Help Determine When the Refund Will Be Issued?
On its own, the IRS cycle code only shows the date when a tax refund entered the Master File system and when tax transcripts will be updated.
However, combined with tax topic codes, a cycle code can suggest that a tax return is being processed or help taxpayers estimate when the IRS will issue the tax refund.
During the processing stage, the account transcript will also show Code 151, indicating that the tax return is under review and neither approved nor rejected. Once the IRS approves the refund, the Code 846 Refund Issued will appear in the tax account transcript.
This code indicates that the processing stage is completed and the direct deposit date was assigned to an account. The DDD is located next to Code 846 in the tax account transcript, and you can use it to determine when the refund will reach your account.
If, for example, your cycle code ends with 02, you can expect the funds on a Tuesday a week after Code 846 is added to the tax account transcript.
This only applies to direct deposit transactions, and you’ll probably have to wait longer if you opt to receive your refund via mail. However, it’s also worth noting that delays occur frequently, so there’s no need to panic if your direct deposit refund is a few days late.
Frequently Asked Questions about the IRS Cycle Code
All taxpayers are assigned new cycle codes for the current fiscal year. Moreover, the IRS can change a taxpayer’s cycle code within the same year. Unfortunately, this usually means that processing a tax return takes longer than usual, and the refund will be delayed.
Codes that indicate a weekly processing cycle ending with 05 are used for tax returns containing questionable or incorrect information. The IRS assigns these codes to a tax refund during the processing period.
Hence, the only way to switch from weekly to daily processing is to provide the additional documents that corroborate the data you included in the tax return.
Final Thoughts
Making sense of the seemingly incomprehensible IRS cycle codes isn’t difficult. Even though each code is unique, all IRS cycle codes have the same structure.
The important thing is not to mistake the code for an actual date. Its middle sections (digits 5 and 6) refer to the week of the year, not the month. The same is true for the code’s last two digits, which indicate the tax return’s processing cycle and not the day of the week.
The cycle code only shows when a tax return is entered into the Master File system and doesn’t indicate when the IRS will issue a tax refund. Nonetheless, together with tax topic codes, this code can help you estimate when a direct deposit refund can reach your bank account.
Author:
Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.
