The IRS said Friday it has started sending out refunds to more than 50,000 taxpayers who benefited from the adoption tax credit carryforward and expects to finish the refund process by the end of the year.
The Treasury Department clarified its interpretation of the adoption tax credit under the One Big Beautiful Bill Act, which Republicans are now calling Working Families Tax Cuts. The new interpretation says that for tax year 2025 only, adoption tax credit carryforwards from prior tax years (2020-2024) can increase the amount of the adoption tax credit that is refundable in 2025, 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 CEO Frank Bisignano said in a statement on Oct. 16. “This administrative change will help families access the tax benefits they are entitled to as quickly and simply as possible.”
The IRS said it will adjust affected taxpayers’ accounts to reflect this change and issue any resulting refunds, notifying taxpayers of any changes made to their accounts.
Taxpayers shouldn’t need to file an amended return to receive the additional credit, the tax agency added.
“This approach offers immediate relief to affected taxpayers, lessening the burden and reducing the necessity to file amended returns,” the IRS said in a media release.
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Eligible taxpayers will receive notices from the IRS, generally within 30 days of the adjustment, letting them know the amount and whether the adjustment resulted in a refund or was applied toward another tax or non-tax debt.
The IRS says taxpayers should review the notice carefully, compare it with their 2025 tax return, and keep it with their tax records.
Affected taxpayers generally don’t need to take action, the media release states. Taxpayers who filed their 2025 return before April 15, 2026, will generally receive any applicable adjustment automatically. Filers who sent their returns 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, the IRS says. For more information, visit IRS.gov/AdoptionCredit.
The IRS recommends that all taxpayers create an IRS Individual Online Account to access their tax account information securely online. The tool enables taxpayers to view their tax records, check refund status, view notices, and make payments without the need to call or mail the IRS.
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