The US Internal Revenue Service (IRS) has begun issuing refunds to more than 50,000 US taxpayers who benefitted from the adoption tax credit carryforwards.
The agency expects to complete refunds for most eligible taxpayers by the end of the year.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The Treasury Department has clarified how it interprets the Working Families Tax Cuts provisions relating to the adoption tax credit.
For the 2025 tax year only, adoption tax credit carryforwards from the 2020–24 tax years may raise the refundable portion of the credit available in 2025.
The measure remains subject to a $5,000 limit for each qualifying child.
IRS CEO Frank J. Bisignano said: “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.
“This administrative change will help families access the tax benefits they are entitled to as quickly and simply as possible.”
The IRS will update the accounts of affected taxpayers to reflect the revised interpretation and issue refunds where applicable. Taxpayers will be notified of any account changes.
Eligible taxpayers will generally not need to submit an amended return to receive the additional credit.
The IRS said the process is intended to provide affected taxpayers with quicker access to the credit while limiting the need for amended filings.
It noted that taxpayers will usually receive an IRS notice within 30 days of an adjustment. The notice will state the amount of the adjustment and confirm whether it resulted in a refund or was used to offset other tax or non-tax debt.
The agency said taxpayers should examine the notice, compare it with their 2025 tax return and retain it with their tax records.
The IRS said that the taxpayers who submitted their 2025 returns before 15 April 2026 will generally receive any relevant adjustment automatically.
Those who filed under an extension, or whose accounts show identity theft indicators, freezes, dependency disputes, or other unresolved matters, will be reviewed later in 2026 once their return has been processed or the relevant account issue has been resolved.
