I paper filed my 2024 tax returns and I received refund more than what's on Line 35a. The IRS transcript online shows "Code 776: Interest credited to your account" which is the difference between refund amount on Line 35a and what IRS actually refunded. What does this mean?
@ sking10
wrote: Received refund more than Line 35a - Code 776 on IRS TranscriptI paper filed my 2024 tax returns and I received refund more than what's on Line 35a. The IRS transcript online shows "Code 776: Interest credited to your account" which is the difference between refund amount on Line 35a and what IRS actually refunded. What does this mean?
In general it likely means the IRS paid you some interest because of any overpayment or refund delay, etc. You said it matches with the extra amount on the refund you received.
The interest you received is taxable income that you will need to report on next year's 2025 return. You may or may not get a 1099-INT for it next year depending on the amount, but you still have to report it next year nonetheless.
You may get an IRS letter explaining the difference in the increased refund amount, but I don't know if they will do it for that or not.