The CP20 means the IRS adjusted one or more tax credits on your return. Credits reduce your tax dollar for dollar, so changes to credits can have a significant impact on your refund or create a balance due. The notice identifies which credit was changed and the resulting effect on your account.
Common Credit Adjustments
The IRS may adjust the Child Tax Credit if qualifying child information doesn't match their records, education credits (American Opportunity or Lifetime Learning) if the educational institution didn't report qualifying expenses, the Premium Tax Credit if Form 1095-A information doesn't reconcile, retirement savings contributions credit if income exceeds the limit, and dependent care credit if the provider's information doesn't match.
Why the Credit Was Changed
Credits are typically adjusted because the IRS received information from third parties that contradicts what you claimed. Educational institutions report tuition on Form 1098-T. Health insurance marketplaces report advance premium credits on Form 1095-A. Employers report dependent care benefits on W-2s. When these don't match your return, the IRS adjusts.
What to Do
Review the adjustment against your records and the relevant forms. If the IRS's information is wrong, contact the issuing institution to request a corrected form and respond to the CP20 with documentation. If you made an error on your return, the adjustment is likely correct.
You have 60 days to dispute math error corrections. After 60 days, the adjustment is final.
If a credit adjustment doesn't look right, call us at (813) 229-7100.