Understanding Why the IRS Changed Your Refund After a Review

If you are tracking your tax return using the IRS Account Transcript, few codes cause more confusion than Transaction Code 290 (TC 290). This code appears when the IRS assesses additional tax or recalculates your return, often reducing your expected refund. TC 290 usually follows a refund hold (TC 570), meaning the IRS completed its review and made a correction to your tax account.

For taxpayers waiting on a refund, seeing TC 290 can be frustrating—but it’s important to understand what it means, why it appears, and what steps you should take next.

This guide breaks down the meaning of TC 290, how it affects your refund, and what the IRS is really checking when they recalculate your return.

What Is TC 290 on an IRS Transcript?

Transaction Code 290 means “Additional Tax Assessed.”
It indicates the IRS made a change to your return that results in:

• A higher tax liability, or
• A reduction of your refund amount, or
• A correction of income, credits, or withholding

TC 290 almost always reflects a correction made by the IRS, not by the taxpayer.

Key Points About TC 290

• It is part of the IRS’s internal correction process
• It usually posts after verification holds
• It may follow TC 570 (refund hold)
• It can be small, moderate, or significant depending on the issue
• It represents the IRS’s final determination after reviewing your return

If TC 290 posts with an amount of $0, it often means the IRS finished its review and made no additional changes—but still had to run the correction cycle.

Why Does the IRS Issue TC 290?

TC 290 appears when the IRS finds something on your return that requires correction. The most common reasons include:

1. Income Mismatch

If your W-2s or 1099s do not match IRS records, the IRS may adjust your taxable income.

Common causes:

• Missing employer wage filings
• Incorrect totals entered on your return
• Late W-2 submissions
• Underreported side income

2. Withholding Errors

If the withholding amounts you reported differ from what employers submitted, the IRS recalculates your refund accordingly.

3. Incorrect Refundable Credits

TC 290 frequently appears when the IRS recalculates refundable credits, including:

• Earned Income Tax Credit
• Additional Child Tax Credit
• Premium Tax Credit
• Education credits

If dependents, residency, schooling records, or income thresholds fail verification, the IRS adjusts the credit amount.

4. Dependent Issues

If the IRS cannot confirm your dependent meets eligibility rules, they may remove or reduce credits tied to that dependent.

Common causes:

• Dependents claimed on another taxpayer’s return
• Social Security Number mismatch
• Residency not established

5. Filing Status Corrections

Incorrectly claiming Head of Household is one of the most common triggers for IRS recalculation.
The IRS will reassess your status and adjust the refund accordingly.

6. PATH Act and Anti-Fraud Checks

During PATH Act holds (EITC/ACTC), the IRS verifies:

• Income
• Dependents
• Work eligibility
• Social Security Numbers

If anything does not line up, TC 290 posts as part of the IRS correction process.

How TC 290 Interacts With Other Transcript Codes

TC 290 rarely appears alone. It is usually part of a sequence of refund hold and correction codes.

Typical Sequence

1. TC 150 – Return filed
2. TC 570 – Refund on hold pending IRS review
3. TC 971 – Notice issued (IRS sends a letter explaining the review)
4. TC 290 – IRS adjusts your return (refund reduced or additional tax added)
5. TC 571 or TC 572 – Hold lifted
6. TC 846 – Refund issued (final amount)

TC 290 is the point in the process where the IRS finalizes the corrected numbers.

Does TC 290 Always Reduce Your Refund?

Not always.

TC 290 Can Mean:

• Additional tax owed (refund decreases)
• Minor adjustments (small changes)
• Zero-dollar adjustment (IRS reviewed and made no changes)

A zero-dollar TC 290 is very common. It simply means the IRS processed the review cycle but did not change your return.

How Do I Know Why TC 290 Posted?

The IRS will usually issue a TC 971 Notice with a corresponding date.
This is your clue that a letter is coming.

Common notices tied to TC 290 include:

• Math error letters
• Credit adjustment letters
• Income verification letters
• Dependent dispute letters
• Refund recalculation summaries

You can also check the “Explanation of Transaction” on the transcript if available.

What Should I Do If I Disagree With a TC 290 Adjustment?

You have several options:

1. Wait for the IRS Notice

The notice will explain:

• What was changed
• Why it was changed
• What you can do to appeal or correct it

2. Compare IRS records to your W-2s, 1099s, or supporting documents

If the IRS is wrong, you can respond with proof.

3. Contact the IRS if the notice does not match your situation

Provide documentation showing:

• Actual income
• Correct withholding
• Dependent eligibility
• College enrollment
• Residency

4. File a reconsideration or amended return

If needed, you can correct mistakes through Form 1040-X.

What Happens After TC 290 Posts?

Once the IRS finalizes your recalculation:

• The hold is lifted (TC 571 or 572)
• The refund is adjusted
• TC 846 posts with your final refund date and amount

At this point, the refund is considered final unless you appeal or amend.

Transaction Code 290 is one of the clearest signs the IRS has completed a review and made an adjustment to your return. It often follows a refund hold (TC 570) and represents the IRS’s final determination after recalculating income, credits, and withholding.

TC 290 can mean:

• Your refund was reduced
• Additional tax was assessed
• A correction was made
• Or, sometimes, no change was needed

Understanding this code helps you know where your return stands and what to expect next—especially if you are waiting on your final refund amount.