The US IRS has begun issuing automatic refunds to more than 50,000 taxpayers affected by a change allowing prior-year adoption tax credit carryforwards to increase the refundable credit for tax year 2025. Eligible families do not need to file amended returns, and most refunds are expected by the end of 2026.
The US Internal Revenue Service (IRS) announced on 16 October 2026 that it has started sending refunds to more than 50,000 taxpayers who used adoption tax credit carryforwards. The agency expects most eligible taxpayers to receive their refunds by the end of the year.
A new rule for tax year 2025
The Treasury Department has clarified how the Working Families Tax Cuts apply to the adoption tax credit. For tax year 2025 only, carryforwards from tax years 2020 to 2024 can increase the portion of the credit that is refundable this year. The limit stays at $5,000 per qualifying child.
No amended returns required
The IRS will adjust affected accounts and issue any resulting refunds without requiring families to file amended returns. Refunds and adjustments began in late September and will continue until complete.
The agency will send notices, generally within 30 days of each adjustment, stating the amount and whether it produced a refund or was applied to another debt owed to the government. Taxpayers should compare each notice with their 2025 return and keep it with their tax records.
IRS Chief Executive Officer Frank J. Bisignano said the change reduces financial pressure on families who adopted children and helps them receive their tax benefits quickly and with minimal paperwork.
Who will face a later review
Taxpayers who filed their 2025 return before 15 April 2026 will generally receive any applicable adjustment automatically. Taxpayers who filed under an extension, or whose accounts carry identity theft indicators, freezes, dependency conflicts or other issues, will be reviewed later in 2026. Those reviews will take place after the return is processed or the account issue is resolved.
The IRS also encourages all taxpayers to create an IRS Individual Online Account. The account allows users to view tax records, check refund status, read notices and make payments without calling or mailing the agency. More information is available at IRS.gov/AdoptionCredit.
