adoption tax credit, USA News: If you adopted a child in recent years, keep an eye on your mail. The IRS has started sending out refunds worth up to $5,000 per child to adoptive families — and they generally don’t have to take any action to get one.
The agency announced on Oct. 16 that it has begun issuing refunds to more than 50,000 taxpayers who benefited from the adoption tax credit carryforward. Refunds and adjustments started in September, and the IRS expects the process to be finished for most eligible taxpayers by the end of the year.
The adoption credit is worth up to $17,280 per child for 2025. Under the tax law the IRS calls Working Families Tax Cuts, up to $5,000 of it is now refundable beginning in tax year 2025. Before that, the credit couldn’t produce a refund, and unused amounts could be carried forward for up to five years.
The Treasury Department has clarified that for tax year 2025 only, carryforwards from 2020 through 2024 can increase the refundable portion of the credit, up to $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 Is Eligible for the IRS Adoption Tax Credit Adjustment?
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, and your 2025 return and account information show your refundable credit should increase. Carryforwards from before 2020 have expired. The FAQ also warns that your result depends on other factors and may be smaller, or there may be no change at all.
Income matters too: For 2025, instructions note the credit begins to shrink for modified adjusted gross income above $259,190 and is eliminated at $299,190, though the IRS says a 2024 carryforward can still allow you to claim it at higher incomes.
Taxpayers who filed their 2025 returns before April 15, 2026 should automatically receive any adjustment due. Returns filed under an extension, and accounts with issues like identity theft indicators, freezes or dependency conflicts will be reviewed later this year.
What to Expect and Notice Details
The IRS says it will send a notice, typically within 30 days of the adjustment, showing the amount and whether it produced a refund or was applied to another debt. Be sure to compare it with your 2025 return and keep it with your tax records.
Don’t file an amended return just to request this adjustment, the FAQ notes. The exception: If you had a qualifying carryforward but left it off your 2025 return, you may need to file Form 1040-X with Form 8839.
“Where’s My Refund?” won’t show this payment. The IRS says to check your notice, IRS Online Account or tax transcript instead.
Any resulting overpayment can be applied to other federal tax liabilities or past-due debts, and the IRS will send a notice if that happens. A spouse who’s entitled to part of an offset refund may be able to claim it with Form 8379.
The IRS also says it won’t automatically recompute or remove an estimated tax penalty tied to the old calculation. You can request relief under your penalty notice’s instructions, or with Form 843 if you no longer have the notice.
Finally, the amount of carryforward available for future years may be reduced, so use the carryforward worksheet in the Form 8839 instructions to update it before you file again.
