IRS sending refunds of up to $5,000 to more than 50,000 adoptive families after tax credit update

If you adopted a child in recent years, watch for mail from the IRS. The agency has begun issuing refunds of up to $5,000 per child to adoptive families, and most people will not need to do anything to receive them.

The IRS said it started sending refunds and adjustments in September to more than 50,000 taxpayers who qualified through the adoption tax credit carryforward. Most eligible taxpayers are expected to see the process completed by the end of the year.

Why the IRS is issuing refunds

The adoption credit can be worth as much as $17,280 per child for 2025. Under the Working Families Tax Cuts law, up to $5,000 of that amount becomes refundable starting with tax year 2025. Before that change, the credit could not generate a refund, and unused amounts could be carried forward for up to five years.

The Treasury Department has said that, for tax year 2025 only, carryforwards from 2020 through 2024 may increase the refundable portion of the credit to as much as $5,000 per qualifying child, according to the IRS.

“By issuing refunds without requiring eligible families to file an amended return, the IRS is helping reduce the financial burden on those who decided to adopt a child into their family,” IRS Chief Executive Officer Frank J. Bisignano said.

Who may qualify

According to the IRS carryforward FAQ, you may be eligible if:

• you filed a 2025 Form 1040, 1040-SR or 1040-NR

• you claimed or were eligible to claim the adoption credit on Form 8839

• you had carryforwards from 2020 through 2024 available for use in 2025

• your 2025 return and account information show that your refundable credit should be increased

Carryforwards from before 2020 have expired. The FAQ also notes that results depend on other factors, so the amount could be smaller or there may be no change at all.

Income also plays a role. For 2025, instructions say the credit begins to phase out when modified adjusted gross income is above $259,190 and disappears at $299,190, although the IRS says a 2024 carryforward may still let some taxpayers claim it at higher incomes.

What taxpayers should expect

Taxpayers who filed 2025 returns before April 15, 2026 should automatically receive any adjustment that is due. Returns filed under extension, along with accounts flagged for issues such as identity theft indicators, freezes or dependency conflicts, will be reviewed later this year.

The IRS says it will send a notice, usually within 30 days of the adjustment, showing the amount and whether it was refunded or applied to another debt. Taxpayers should compare the notice with their 2025 return and keep it with their records.

The agency says not to file an amended return solely to request this adjustment. The exception is if you had a qualifying carryforward but left it off your 2025 return; in that case, you may need to file Form 1040-X with Form 8839.

Important details and where to learn more

“Where’s My Refund?” will not show this payment. Instead, the IRS says taxpayers should check their notice, IRS Online Account or tax transcript.

Any overpayment may be applied to other federal tax liabilities or past-due debts, and the IRS will send a notice if that happens. A spouse who is entitled to part of an offset refund may be able to claim it using Form 8379.

The IRS also says it will not automatically recalculate or remove an estimated tax penalty tied to the old calculation. Taxpayers can request relief using the instructions in the penalty notice, or file Form 843 if the notice is no longer available.

Finally, the carryforward amount available for future years may be reduced, so taxpayers should use the carryforward worksheet in the Form 8839 instructions before filing again.

More information is available at IRS.gov/AdoptionCredit.