IRS Begins Automatic Adoption Tax Credit Refunds for Eligible Families

The Internal Revenue Service (IRS) has begun issuing automatic refunds to eligible taxpayers who claimed the Adoption Tax Credit carryforward from previous years.

Under updated guidance announced October 16, 2026, certain unused adoption tax credits from 2020–2024 may increase the refundable portion of the credit for the 2025 tax year, subject to a limit of $5,000 per qualifying child.

The good news for adoptive families: Eligible taxpayers generally do not need to file an amended tax return. The IRS will automatically adjust affected accounts and issue any refunds due. More than 50,000 taxpayers have already benefited, and the IRS expects most eligible refunds to be processed by the end of 2026.

Families should watch for an IRS notice explaining any adjustment and whether a refund was issued or applied to outstanding debts. Taxpayers whose returns were filed under an extension or whose accounts require additional review may experience delays.

For more information, visit the IRS Adoption Tax Credit page at IRS.gov/AdoptionCredit.

At Heart Of Adoptions Inc., we encourage adoptive families to stay informed about tax benefits that may help make adoption more affordable. Families with questions about their individual tax situations should consult a qualified tax professional. Call 1-800-Go-Adopt 24/7