CP 21B - Data Processing Adjustment Notice, Overpayment of $1 or More

This IRS notice "21B" typically is not a bill - it means the IRS has made changes you requested to your tax return and there was an overpayment based on this adjustment. You will be receiving an additional tax refund within 2-3 weeks of the notice. The notice explains the changes to the tax return. 

Receiving an IRS Notice CP21B can sometimes be confusing, especially if you’re unsure why it was issued. This notice typically indicates changes to your tax return that have resulted in an adjusted refund amount. Knowing the reasons behind this notice and how to respond is key to ensuring compliance and avoiding issues. 

The IRS sends CP21B notices to inform taxpayers of adjustments made to their tax returns, usually resulting in a change to the refund amount. These adjustments often arise from corrections to reported income, recalculations of credits or deductions, or the application of carryforward amounts from prior tax years. For instance, if incorrect income figures were reported, the IRS may correct these, affecting the refund.

Taxpayers may also receive a CP21B notice due to changes in tax credits, such as the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC). These credits have specific eligibility requirements and income limits, which can vary annually. If the IRS determines that a taxpayer qualifies for a higher credit than originally claimed, the refund will increase. Conversely, if eligibility decreases, the refund will be reduced.

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IRS ref: https://www.irs.gov/individuals/understanding-your-cp21b-notice