It means that last you year (2020) more taxes were withheld from your pay than you owe. So you have $365 coming back to you. If you answer yes to the question, you can allow the feds to keep the $365 or a part of the $365 as prepaid taxes for next year (2021). If you answer no, you will get all $365 back as a refund from the feds in the next month or so.
