IRS Transcript Codes 290 & 291: Tax Adjustments and How They Impact Your Refund

If your IRS transcript suddenly shows Code 290 or Code 291, it means the IRS made a correction to your tax return — and your refund amount may have changed.

These codes appear during Error Resolution processing, which often follows:

Wage/income mismatch
Dependent claim issues
Credit qualification adjustments (EITC/CTC)
Recovery Rebate / Stimulus corrections
Withholding reporting errors
IRS catching missing income from W-2/1099 files

This article explains what each adjustment code means, what caused it, and what happens next.

Code 290 — Tax Assessed (Refund Reduced or Amount Owed)

Code 290 means the IRS added tax to your return.

This can result in:

A reduced refund, or
A new balance owed to the IRS

Common reasons for Code 290:

IRS located more income than reported
Tax credits were reduced or denied
Filing status corrected
Child/Dependent errors
Math error on return

Code 290 almost always results in less money.

Your transcript will show a dollar amount next to Code 290
— this is the amount added to your tax liability.

Code 291 — Tax Decreased (Refund Increased)

Code 291 is a positive update.
It means the IRS reduced your tax liability.

That usually happens when:

Eligible credits were increased
Dependents or withholding got re-verified
IRS corrected something in your favor

This code adds more money to your refund.

Where You Will See the Change

Watch your Refund Amount section:

Code Combo	Change Result
Code 290 only	Refund lowered → or balance owed
Code 291 only	Refund increased
290 + 971	IRS will send a letter explaining why
290 → 291	IRS corrected itself (refund restored)

Example Scenarios

Issue	First Code	Second Code	Result
Missing income found	290 posted	none	Refund reduced
Credit denied then approved	290	291	Refund reinstated
Wage mismatch resolved	971 notice	291	Refund increased
IRS math correction	290	none	Partial reduction

If Code 971 appears, a notice has been sent (or will be).

What Happens to Your Refund Timeline?

Adjustments reset part of your processing timeline temporarily.

Stage	What IRS Does	Timeline Impact
Code 290	Adjustment posted	Freeze refund
Code 291	Adjustment reversed	Refund re-reviewed
Code 846	Refund approved	Deposit scheduled

Most taxpayers see 2–6 week delays after adjustments.

Should You Call the IRS?

Call ONLY if:

✔ Code 290 reduces refund and you disagree
✔ Code 971 notice requests documents
✔ No movement for 60+ days after adjustment
✔ Adjustments are major (thousands of $ change)

IRS phone: 800-829-1040

Positive Signs to Watch For

These often appear before refund release:

571 / 572 — Hold cleared
811 — Freeze removed
As of Date moves forward
Code 846 — Refund issued

Once 846 posts — countdown to deposit begins.

Quick Interpretation Table

Code	Meaning	Action Required
290	Tax assessed → refund reduced	Review notice
291	Tax decreased → refund increased	None
971	Notice issued	Read & respond if instructed
846	Refund approved	Track deposit