# Code 766 on an IRS transcript: a refundable credit on your account

Source: https://taxrefunddesk.com/transcript-codes/transcript-code-766
Publisher: Tax Refund Desk (taxrefunddesk.com), independent editorial site
Topic: Transcript Codes
Last updated: 2026-09-19

> Code 766 on an IRS transcript is a credit the IRS generated to allow a refundable credit on your account, most often the Additional Child Tax Credit. It is one piece of your refund math, not the refund itself. A 766 can also appear later with an offset trace number, which means a Treasury offset (TC 898) was reversed.

## Key facts

- TC 766 meaning: Generated refundable credit allowance (Document 6209)
- Common source on Form 1040: Additional Child Tax Credit (credit reference 336 posts as TC 766)
- Second use: Reverses a TC 898 offset carrying the same offset trace number
- Reversal code: TC 767 takes a 766 credit back
- Actual refund code: TC 846

## What does code 766 mean on an IRS transcript?

Code 766 on an IRS transcript is a "Generated Refundable Credit Allowance." IRS Document 6209 says the master file generates it to allow a refundable credit that was verified on the return, or that came from an examination or adjustment, and was not already posted. It appears as a negative (credit) amount that lowers what you owe or adds to your overpayment.

A refundable credit is one the IRS pays even when it is larger than your tax. That is why a 766 can push your account below zero, creating a refund, even when the [TC 150](https://taxrefunddesk.com/transcript-codes/transcript-code-150) tax line is small or $0.00.

## Which credits show as IRS transcript code 766?

The IRS assigns each type of credit a credit reference number, and Section 8C of Document 6209 lists which of them post as TC 766. The earned income credit is the main exception, because it has its own code, [TC 768](https://taxrefunddesk.com/transcript-codes/transcript-code-768). Withholding also has its own code, TC 806.

For most families, the 766 on a Form 1040 account transcript is the Additional Child Tax Credit (ACTC). Returns claiming the ACTC fall under the PATH Act, so the whole refund is held until after February 15. See our [PATH Act refund hold](https://taxrefunddesk.com/refund-delays/path-act-refund-hold) page for that timing.

## Is 766 my refund amount?

No. The 766 is one credit line, and your refund is the net of every line for the year. The refund amount appears on TC 846. Only when your tax and other credits happen to cancel out does the 766 equal the refund.

### Worked example

| Code | Explanation | Amount |
| --- | --- | --- |
| 150 | Tax return filed (total tax) | $1,050.00 |
| 806 | Withholding | -$2,300.00 |
| 766 | Credit to your account (ACTC) | -$1,500.00 |
| 846 | Refund issued | $2,750.00 |

Example: how TC 766 feeds the refund

Here the credits total $3,800 ($2,300 plus $1,500). Subtract the $1,050 tax and the overpayment is $2,750, the amount on TC 846. The 766 is $1,500, which is neither the refund nor a separate payment.

## Why is there a code 766 with an offset?

A code 766 with an offset usually means money taken by the Treasury Offset Program has been put back. When the Bureau of the Fiscal Service (BFS) takes part of a refund for a debt, the transcript shows TC 898. Document 6209 says a TC 898 is reversed by a TC 766 carrying the same offset trace number (OTN), or by a TC 899.

That reversal happens when the offset was wrong or has to be split, for example after an injured spouse claim on [Form 8379](https://taxrefunddesk.com/reduced-refunds/injured-spouse-form-8379) shows part of a joint refund belonged to the spouse who did not owe the debt. A new TC 846 then pays out the returned amount.

| Code | Explanation | Amount |
| --- | --- | --- |
| 846 | Refund issued | $2,750.00 |
| 898 | Refund applied to non-IRS debt | -$900.00 |
| 766 | Credit to your account (offset reversed, same OTN) | -$900.00 |
| 846 | Refund issued | $900.00 |

Offset example on one tax year

If the offset was correct, it is not reversed. You dispute the debt with the agency named in the BFS offset notice, not with the IRS. Our [refund offset reversal](https://taxrefunddesk.com/reduced-refunds/refund-offset-reversal) page covers when a reversal is possible.

## What does code 767 mean next to a 766?

TC 767 is the reversal of a 766. It shows as a debit, and it means the IRS took back some or all of a refundable credit, often after a review found you did not qualify for part of it. A 767 lowers the refund by that amount, and a notice explaining the change should follow.

A separate type of 767, carrying an offset trace number, reverses a 766 that was itself an offset reversal. Document 6209 says it is used only to correct a rejected offset reversal, so it is rare on individual transcripts.

## Related codes to read with 766

- **TC 768**: earned income credit, posted separately from the 766.
- **TC 806**: credit for withheld tax from W-2s and 1099s.
- **TC 570**: a hold. A 766 can post while the refund is frozen.
- **TC 290**: an adjustment that may add a 766 or a 767 as part of the same change. See [TC 290](https://taxrefunddesk.com/transcript-codes/transcript-code-290).
- **TC 846**: the refund actually issued.

The full code list, with plain-English meanings, is on our [IRS transcript codes](https://taxrefunddesk.com/transcript-codes) page.

## Common questions

### Does code 766 mean my refund is coming?

Not on its own. It means a refundable credit was allowed on your account. The refund is scheduled when TC 846 posts with a date, and it can still be held by a TC 570 or TC 810.

### Why does my transcript show two 766 codes?

Two 766 lines can mean two different credits, or a credit on the original return plus a later offset reversal. Check whether one line mentions an offset or appears after a TC 898.

### Why is my 766 amount negative?

Transcripts show credits as negative numbers because they reduce the balance owed. A negative 766 is normal and helps you.

### Is code 766 the child tax credit?

On most individual transcripts it is the refundable part, the Additional Child Tax Credit. The nonrefundable part of the child tax credit lowers your tax directly, so it is already reflected in the TC 150 amount.

### Can the IRS take back a 766 credit?

Yes. If a review finds you did not qualify, the IRS posts TC 767 to reverse it and mails a notice explaining the change and your right to disagree.

## Sources

- [IRS Document 6209, Section 8A: Master File Codes](https://www.irs.gov/pub/irs-6209/6209sec8amasterfilecodes.pdf)
- [IRS Document 6209, Section 8C: Master File Codes (credit reference numbers)](https://www.irs.gov/pub/irs-6209/6209sec8cmasterfilecodes.pdf)
- [Tax Topic 203, Reduced refund](https://www.irs.gov/taxtopics/tc203)
- [About Form 8379, Injured Spouse Allocation](https://www.irs.gov/forms-pubs/about-form-8379)
- [When to expect your refund if you claimed the EITC or ACTC](https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/when-to-expect-your-refund-if-you-claimed-the-earned-income-tax-credit-or-additional-child-tax-credit)