IRS Code 806: Credit for Withheld Taxes (W-2 or 1099 Withholding)
IRS code 806 is the credit for federal income tax withheld (from your W-2s and 1099s) and any excess Social Security tax you claimed on your return. It is a normal part of every processed return with withholding.
What code 806 actually means
Document 6209 describes transaction code 806 as a credit for the withholding and excess FICA claimed on a Form 1040. The Taxpayer Advocate Service describes it as the credit you are given for tax withheld, and transcripts often label it "W-2 or 1099 withholding." It appears as a negative amount because it is a credit.
The 806 amount usually matches the total federal withholding you claimed. If the IRS later changes it, Document 6209 says the reduction posts as a separate 807 line, usually with a notice.
An 806 does not mean the IRS has finished checking your income and withholding. Separately, the IRS may compare what you claimed with what employers and payers reported, which is what CP05 and Letter 4464C reviews are about.
What to do next
- 1Add up the federal withholding on all your W-2s and 1099s and compare it with the 806 amount.
- 2If you see an 807 or the 806 is lower than you claimed, look for an IRS notice explaining the change.
- 3If you get a CP05 or Letter 4464C asking to verify income and withholding, follow its instructions; the IRS asks you not to call until 60 days after the notice date.
- 4If the amounts don't match and you aren't sure why, a tax professional can compare your transcript with your forms; we offer a free consultation.
Codes it often appears with
The processed return the withholding belongs to.
Code 807
Reverses all or part of the 806 withholding credit.
Refund issued if withholding and credits exceed the tax.
A hold that can post during an income/withholding review.
Letters that often go with it
Common questions
What does code 806 mean on my IRS transcript?+
It is the credit for federal income tax withheld from your pay or other income (W-2s and 1099s), plus any excess Social Security tax, as claimed on your return.
Why is my 806 amount different from my W-2?+
The 806 reflects all withholding claimed on your return, so it may combine several forms. If the IRS changed it, you would usually see an 807 line and receive a notice.
Why is 806 a negative number?+
Credits to your account, like withholding and payments, show as negative amounts because they reduce your balance.
Does 806 mean my refund is coming?+
No. It means your withholding posted. A refund appears as 846; check Where's My Refund for timing.
Checked against IRS primary sources — see how we source these guides. Transcripts show what has posted, not every action in progress; notices mailed to you and your IRS online account are the controlling record.
Other transcript codes
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