The IRS has started sending automatic refunds to more than 50,000 taxpayers who carried adoption credits forward from earlier years. The agency announced the payments Oct. 16 in news release IR-2026-123. Affected families generally do not have to file an amended return or take any other step to get the money.
The refunds come from a change in how Treasury reads the adoption credit for tax year 2025. They began in late September, and the IRS expects most of them to be finished by the end of 2026.
Which adoption credit carryforwards qualify for the refund
The IRS says Treasury clarified its interpretation of the “Working Families Tax Cuts” as they affect the adoption credit. For tax year 2025 only, carryforwards from tax years 2020 through 2024 can increase the refundable portion of the adoption credit. The increase is limited to $5,000 per qualifying child.
The IRS’s adoption credit page says that beginning in tax year 2025, a portion of the credit is refundable up to $5,000 per qualifying child. The part that stays nonrefundable can be carried forward for a maximum of five years, and anything left after five years is forfeited.
The question for adoptive parents is whether they are in the group and what the refund will be. Families who claimed the credit on Form 8839 in 2020 through 2024 and still had an unused carryforward are the ones the IRS describes. The refund cannot top $5,000 for each qualifying child, and the IRS has not published an average or a total.
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No amended return, but some accounts wait
The release says taxpayers who filed their 2025 return before April 15, 2026, will generally receive any adjustment automatically. The IRS is making the changes on its own, so no one needs to send in a corrected form.
Some accounts are being held for later review. The IRS says taxpayers 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 processing or once the issue is resolved. The agency has not said how many accounts fall into that group.
IRS Chief Executive Officer Frank Bisignano said the agency is issuing refunds “without requiring eligible families to file an amended return.” The release frames the move as a way to ease the financial burden on families who adopted.
The IRS notice and what can reduce the refund
The IRS will notify taxpayers of any change to their accounts, generally within 30 days of the adjustment. Each notice states the amount and whether the change produced a refund or was applied to another tax debt or to a non-tax debt.
That second point matters. A refund that is applied to an overdue tax bill or to a non-tax debt will not arrive as cash. The IRS tells taxpayers to compare the notice with their 2025 return and to keep it with their tax records.
The release does not say whether the refunds go out by check or direct deposit. It also does not address how carryforward amounts beyond the refundable portion are treated, so families with a large leftover credit should read the notice for that detail.
Checking an account through the IRS online account
The IRS encourages taxpayers to create an Individual Online Account. According to the IRS, the account shows refund status, digital copies of notices and key return details, and it lets people make payments. New users should have photo identification ready for sign-in.
An online account is the quickest way to see whether an adoption-credit adjustment has posted before a paper notice arrives. It also keeps notices in one place, which helps when the amount on the notice has to be matched against the 2025 return.
The IRS points families to IRS.gov/AdoptionCredit for more information on the credit. The page also lists the income limits that still apply. For 2025, the credit is reduced for taxpayers whose modified adjusted gross income was between $259,191 and $299,189, and it is unavailable at $299,190 or more.
The credit page also covers special needs adoptions. A family can claim the full credit for such an adoption even if it paid no qualified adoption expenses, and the credit is claimed when the adoption is final. The child must be a U.S. citizen, and a state or tribal government must have determined that the child cannot or should not return home and is unlikely to be adopted without help.
Form 8839, Qualified Adoption Expenses, is the form that is attached to the return. The child’s identifying number on it can be a Social Security number, an adoption taxpayer identification number or an individual taxpayer identification number. Families with a pending adoption apply for the adoption number on Form W-7A.
What adoptive parents still have to find out
The open question for each family is the amount: whether it falls under the $5,000-per-child limit, and whether any of it was kept for a debt. Only the notice answers that, and the IRS says it will generally arrive within 30 days of the adjustment. Families that adopted more than one child, or that carried credits from several years, have the most to compare.
The IRS has said it began issuing the refunds in late September and expects to finish most by the end of 2026. Anyone whose account is under review for an extension, identity theft indicator or dependency conflict should expect to hear later in the year.
Waiting on an IRS adoption credit refund?
A refund that arrives without a request is easy to misread. The notice can show the money was applied to a debt, and a family that never opens it may not notice a smaller amount than the 2025 return implies.
The IRS Refund Recovery Kit includes a notice decoder for reading IRS letters like this one and a refund status tracker spreadsheet for logging what posted and when. It also lays out the refund-trace steps using Form 3911 for a payment that never arrives.
Match the IRS notice to the refund with the notice decoder and tracker →
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This article was produced with the assistance of AI and reviewed by the editorial team.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
