The IRS has started automatically refunding people who carried forward unused adoption tax credit from tax years 2020 through 2024. For 2025 only, those carryforwards can raise the refundable part of the credit, capped at $5,000 per child. Most people don't need to do anything or file an amended return. Watch for an IRS notice with your adjustment amount.
Key takeaways
- On October 16, 2026, the IRS said it has already issued adoption credit refunds to more than 50,000 taxpayers and expects most to be done by year-end.
- The refunds apply to unused adoption credit carried forward from tax years 2020 through 2024, and the extra refundable amount is capped at $5,000 per qualifying child.
- Most people who filed their 2025 return before April 15, 2026 get any adjustment automatically, with no amended return needed.
- Extension filers and accounts with identity theft flags, freezes or dependency conflicts are reviewed later in 2026.
- The IRS notice should arrive within about 30 days of the adjustment and says whether you got a refund or the money went to a debt.
If you adopted a child in the last several years and could not use your whole adoption tax credit, the IRS may owe you money. On October 16, 2026, the agency announced in IR-2026-123 that it has begun sending automatic refunds to people who carried unused credit forward from earlier years.
The IRS says it has already refunded more than 50,000 taxpayers and expects most eligible refunds to be finished by the end of 2026. Here is who qualifies, what the rules are, and what to do while you wait.
Why is the IRS sending adoption credit refunds?
The adoption credit used to be fully “nonrefundable.” That means it could only cut your tax bill down to zero. If you owed less than the credit, the leftover was carried forward to a future year, but you never got it as cash.
Starting in 2025, up to $5,000 of the credit per child is refundable, according to the IRS adoption credit page. The IRS says Treasury has now clarified how that works: for tax year 2025 only, carryforwards from earlier years can increase the refundable portion, subject to the $5,000-per-child limit.
In plain terms, money that sat unused on your old returns can now come back to you as a refund for 2025.
Who gets the refund?
The IRS release says the refunds are for people with adoption credit carryforwards from tax years 2020 through 2024. How fast you get yours depends on when you filed:
| Your situation | What the IRS says |
|---|---|
| Filed your 2025 return before April 15, 2026 | You will generally get any adjustment automatically |
| Filed your 2025 return under an extension | Reviewed later in 2026 |
| Identity theft indicators, account freezes, dependency conflicts or other issues | Reviewed later in 2026, after processing or once the issue is resolved |
The IRS says you generally don’t need to take action and don’t need to file an amended return.
How much could you get?
The key limit is $5,000 per qualifying child on the refundable part. The IRS release does not give an average refund, so this is only an illustration of how the cap works.
Say a family has two adopted children. Child A has $4,000 of carryforward and Child B has $9,000. Each child is figured separately, as the Form 8839 instructions describe for the refundable portion.
- Child A: $4,000 is under the $5,000 cap, so up to $4,000
- Child B: $9,000 is over the cap, so up to $5,000
- Total: $4,000 + $5,000 = up to $9,000
This assumes no refundable amount was already claimed for those children, which the IRS release doesn’t address. Your actual number will be on your IRS notice.
What are the 2025 adoption credit rules?
These are the figures for 2025 from the IRS adoption credit page and Form 8839 instructions:
| Item | 2025 amount |
|---|---|
| Maximum credit per qualifying child | $17,280 |
| Refundable portion | Up to $5,000 per child |
| Carryforward of the nonrefundable part | Up to 5 years |
| Full credit if modified adjusted gross income (MAGI) is | $259,190 or less |
| Credit is reduced if MAGI is | $259,191 to $299,189 |
| Credit is unavailable if MAGI is | $299,190 or more |
Note that a carryforward stays nonrefundable under the normal rules. The refund described in this news is a one-time rule for tax year 2025.
What if the refund goes to a debt?
The IRS notice will state the adjustment amount and whether it produced a refund or was applied to another tax or non-tax debt. So read it before you plan to spend the money.
What to do now
- Don’t file an amended return. The IRS says most people don’t need to.
- Watch your mail. Notices generally arrive within 30 days of the adjustment.
- Compare the notice with your 2025 return. Check the adjustment amount against your Form 8839 and keep the notice with your tax records.
- Set up an IRS Individual Online Account. The IRS suggests it for viewing records, checking refund status and reading notices.
- If you filed on extension, be patient. Your account will be reviewed later in 2026.
- Plan for next year. A refund changes your cash flow, not your withholding. Use the income tax calculator or paycheck calculator to see how credits affect your numbers, and check the 2026 tax numbers for current limits.
For more, the IRS has a dedicated page at IRS.gov/AdoptionCredit.
Frequently asked questions
Who gets the adoption tax credit refund?
People who have adoption credit carryforwards from tax years 2020 through 2024 and claimed the credit on their 2025 return. The IRS says Treasury clarified its reading of the 2025 tax law, so for 2025 only, those carryforwards can increase the refundable portion of the credit. The refundable amount is limited to $5,000 per qualifying child.
Do I need to file an amended return for the adoption credit refund?
Generally no. The IRS says most people don't need to take any action and don't need to file an amended return. If you filed your 2025 return before April 15, 2026, you will generally get any adjustment automatically. Keep an eye out for an IRS notice, and compare it with your 2025 return.
How much is the adoption tax credit for 2025?
For 2025, qualified adoption expenses are limited to $17,280 per qualifying child. Up to $5,000 of the credit per child is refundable, and the rest is nonrefundable. Any unused nonrefundable credit can be carried forward for up to five years. The credit phases out for modified adjusted gross income from $259,191 to $299,189 and is unavailable at $299,190 or more.
Why haven't I received my adoption credit refund yet?
The IRS is reviewing some accounts later in 2026. That includes people who filed under an extension and accounts with identity theft indicators, freezes, dependency conflicts or other issues. If one of those fits you, the IRS says it will review your account after processing or once the issue is resolved. Notices generally arrive within 30 days of an adjustment.
Can the refund be taken for other debts?
Possibly. The IRS notice will tell you the adjustment amount and whether it became a refund or was applied to another tax or non-tax debt. Read the notice carefully when it arrives. If the amount doesn't match what you expected, the IRS page at IRS.gov/AdoptionCredit is the place to start for more information.