Tax transcript codes are like a roadmap through the tax filing process because they inform taxpayers when the process starts, how it progresses, and when it ends. Understanding from this perspective what the processing date means on an IRS transcript is pretty simple because it marks the completion of the tax return’s processing stage.
It is the date the IRS expects to complete processing of that particular tax return, and taxpayers can use it to estimate when a tax refund might reach their account.
This date isn’t fixed, and it can change, if the IRS needs more time to process a tax return. Consequently, you must check this date occasionally to determine if your refund will be issued on time.
Let’s take a closer look at what the Processing Date on an IRS transcript might mean and how you can use it to guess when this year’s tax refund will be on your account.
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The Individual Master File System
All tax returns must enter the IRS Individual Master File system before their processing can begin. The system accepts e-filed tax returns, and it usually needs up to 48 hours to approve them.
The IRS might need a few weeks to approve the entry of tax returns submitted on paper into the IMF system. Then, depending on the filling method you used, you’ll have to wait between two days and four weeks before you can request your tax transcript.
The document will enable you to monitor your tax return’s status and inform you if the IRS detects an issue during the processing stage.
How to Access Your Tax Transcript?
The Get Transcript tool on the IRS website allows taxpayers to have instant access to their tax transcripts.
You must explain why you want to access a tax transcript before viewing it online or downloading it to a computer.
The document will contain Code, Explanation of Transaction, Cycle, Date, and Amount columns. However, the list of codes and associated transactions and dates might expand once the IRS starts processing your tax return.
Some codes, like Code 150, don’t affect the Processing Date, while others, such as Code 570 could be the reason why the Processing Date on your tax transcript changed.
What is the Processing Date?
The IMF system will generate the Processing Date automatically and add it to a tax transcript as soon as the processing stage begins. It represents a default date when the IRS expects to finish processing a tax return and approve a refund.
As a result, the Processing Date will be three weeks after the date when a tax return has entered the IMF system. You’ll find the same date next to the IRS Code 150. The date’s purpose is to remind the system to conclude the processing stage if nothing unusual was detected or provide an update on the tax return’s status.
The Processing Date will change if the IRS cannot process a tax return in three weeks. The date it shows is usually the first day of the week starting from the date indicated by the IRS Cycle Code.
Where to Find the Processing Date on an IRS Transcript?
The Processing Date is always located next to the Cycle Code, indicating the account’s updating frequency. It is always the first date in the Date column, showing when the default 21-day processing period will expire.
The format of the Processing Date has the standard dd/mm/yy structure. The dates displayed below the Processing Date in the Date column are called Transaction Dates. Unlike the Processing Dates, the Transaction Dates that accompany different codes are fixed.
It’s also worth noting that the IRS doesn’t issue the same Processing Date for taxpayers’ transcripts for two years. Hence your Processing Dates on 2022 and 2023 tax transcripts will be different.
The Processing Date only shows when the tax return’s processing should end, and it doesn’t suggest when a tax refund will reach a taxpayer’s bank account.
The Refund Payment Date appears in a tax transcript together with the Code 846, followed by the Refund Issued message in the Explanation of Transaction column once the IRS approves a refund.
On the other hand, the Processing Date stays in a tax transcript throughout the processing stage and can only help you estimate when a refund might be issued.
Reasons Why Processing Date Keeps Changing
It’s easy to overlook the fact that the Individual Master File generates the Processing Date automatically based on default system parameters.
Consequently, this date will always be three weeks away from the date a tax return enters this system. The IMF will change this date if tax return processing is delayed for whatever reason. In most cases, the Processing Date will change under these circumstances:
- A tax return contains an error – Claiming a tax credit you’re not eligible for or incorrectly calculating taxable income is among numerous examples of tax return errors. The IRS usually corrects these mistakes without notifying a taxpayer in any other way but by changing the Processing Date.
- The IRS needs more information from a taxpayer – You’ll receive an audit letter or a math error notice if the information in your tax return isn’t sufficient for the IRS to approve the tax refund.
- Inefficient processing – The IRS has been struggling to process tax returns within the three-week timeframe, so the lack of efficiency might be the reason Processing Date on your tax return keeps changing.
Frequently Asked Questions
Yes, the Processing Date will always be at the top of a tax transcript’s Date column.
You shouldn’t be too concerned with this date because it only reveals that the IRS needs more time to process tax returns with EITC and ACTC claims. Taxpayers eligible for the PATH cannot receive their tax refunds before the Processing Date expires.
Taxpayers that have the same processing dates on their tax transcripts usually don’t get their refunds on the same day, even if their tax returns are processed on the same day.
Keeping an eye on a tax return’s status throughout the entire processing stage is often unnecessary. That’s why you should start paying attention to the Processing Date if your tax refund doesn’t arrive on time.
Final Thoughts
Like most codes and dates the IRS adds to tax transcripts, the Processing Date is purely informative. It merely tells taxpayers the earliest date their tax returns can be processed.
However, the Processing Date often changes due to various issues that can occur while a tax return is under review. This date also helps the Individual Master File system know when to check an account for updates and add Code 846 to a tax transcript after a refund is approved.
Don’t forget that the Processing Date doesn’t show the exact date the refund will be issued, but it can help you determine how long you’ll have to wait for the funds to become available in 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.
