IRS starts automatic refunds for more than 50,000 adoption tax credit carryforward filers

More than 50,000 taxpayers who claimed the adoption tax credit carryforward in prior years are receiving automatic refunds from the IRS. The agency expects the refund process to be complete for most eligible taxpayers by the end of the year.

The change follows a Treasury Department clarification of how the Working Families Tax Cuts apply to the adoption tax credit. For tax year 2025 only, carryforwards from prior tax years, 2020 through 2024, can increase the amount of the credit that is refundable, subject to the $5,000 per qualifying child limitation.

“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. He said the administrative change would help families access the tax benefits they are entitled to as quickly and simply as possible.

The IRS is adjusting affected accounts and issuing any resulting refunds, and it says taxpayers should not need to file an amended return. Notices generally go out within 30 days of the adjustment, stating the amount and whether the adjustment produced a refund or was applied toward another tax or non-tax debt. The agency tells taxpayers to review the notice, compare it with their 2025 return and keep it with their tax records.

Adjustments and refunds began in late September and will continue until complete, according to the announcement. Taxpayers who filed their 2025 return before April 15, 2026 will generally receive any applicable adjustment automatically. Those who filed under an extension, or whose accounts have identity theft indicators, freezes, dependency conflicts or other issues, will be reviewed later in 2026, after the return is processed or the account issue is resolved.