IRS Starts Automatic $5,000 Refunds for Taxpayers With Adoption Credit Carryovers

Taxpayers generally will receive a notice from the IRS within about 30 days after an adjustment is made. The notice will explain the amount involved and whether it was sent as a refund or used to offset another tax or non-tax debt.

The Internal Revenue Service has started sending refunds to more than 50,000 taxpayers who claimed the adoption tax credit carryforward and says most eligible refunds should be processed by the end of the year.

The Treasury Department has also clarified how it is interpreting the Working Families Tax Cuts as it relates to the adoption tax credit. Under that interpretation, for tax year 2025 only, carryforwards from prior tax years, from 2020 through 2024, may increase the refundable portion of the adoption tax credit in 2025, up to a limit of $5,000 per qualifying child.

“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,” said IRS Chief Executive Officer Frank J. Bisignano. “This administrative change will help families access the tax benefits they are entitled to as quickly and simply as possible.”

The IRS will update affected taxpayers’ accounts to reflect the change and issue any refunds that result. Taxpayers will be notified of any changes made to their accounts, and they should not need to file an amended return to receive the additional credit. The process is intended to provide quicker relief while avoiding the need for extra paperwork.

In most cases, taxpayers will receive a notice within 30 days of the adjustment. The notice will show the amount and whether the adjustment produced a refund or was applied to another tax or non-tax obligation. Taxpayers are advised to review the notice carefully, compare it with their tax return, and keep it with their records.

Refunds and adjustments began in late September and will continue until the process is finished. Most affected taxpayers do not need to take any action. Those who filed their 2025 return before April 15, 2026, will generally receive any eligible adjustment automatically. Returns filed under an extension, or accounts with identity theft indicators, freezes, dependency conflicts, or other issues, will be reviewed later after the return is processed or the account issue is resolved. More information is available at IRS.gov/AdoptionCredit.

The IRS also encourages taxpayers to create an IRS Individual Online Account to securely access tax account information online. The account allows users to view tax records, check refund status, see notices, and make payments without calling or mailing the agency.