TaxWrenWhat changed
- The IRS said on October 16, 2026 (IR-2026-123) that it has begun automatically refunding adoption credit carryforwards from 2020 through 2024 on 2025 returns, up to $5,000 per qualifying child.
- You do not need to file an amended return. The IRS has already refunded more than 50,000 taxpayers and expects most refunds to finish by December 31, 2026.
- A notice should arrive within about 30 days of the adjustment. Compare it with your 2025 return.
On this page
The IRS announced on October 16, 2026 (IR-2026-123) that it has started refunding adoption credit carryforwards automatically. Refunds and adjustments began in late September 2026, and more than 50,000 taxpayers have already been paid. If you carried unused adoption credit forward from 2020 through 2024 onto your 2025 return, the IRS says you do not need to file an amended return.
| Item | What the IRS said |
|---|---|
| Who | Taxpayers who claimed an adoption credit carryforward on their 2025 return |
| Which carryforwards | From 2020 through 2024 |
| How much | Up to $5,000 per qualifying child can be refundable |
| What you do | Nothing. No amended return |
| Proof | A notice about 30 days after the adjustment |
| Finished | Most refunds by December 31, 2026 |
Source: IRS IR-2026-123.
What changed?
Carryforwards can increase the refundable part of the adoption credit, subject to the $5,000 per qualifying child limit. The IRS says the change comes from a Treasury Department reinterpretation of the Working Families Tax Cuts law and applies to 2025 only. For 2026, the IRS adoption credit page puts the refundable amount at up to $5,120 per child, claimed on Schedule 3-A. Unused nonrefundable credit can be carried forward for at most 5 years; anything left after that is forfeited.
When will the money arrive?
Anyone who filed a 2025 return before April 15, 2026 will generally get the adjustment automatically. The IRS expects most eligible refunds to be done by the end of the year. Returns filed on extension, or held for identity theft indicators, freezes, dependency conflicts or other issues, will be reviewed later in 2026, after processing or once the issue is resolved.
What should you check?
This is separate from proposed rules that would limit the refunded part of this credit to citizens, nationals and qualified aliens. See our post on the proposal.
Do TaxWren's calculators include it?
No. The calculators do not model the adoption credit, so no figure on the site changes. Plan for any refund on your own using the IRS notice.
Sources
- IRS: IR-2026-123: IRS has begun issuing automatic refunds to individuals who claimed Adoption Tax Credit carryforward (official)
- IRS: Adoption credit (official)
Figures come from the official documents listed above. See our methodology and editorial policy. This article is general information, not tax advice.
Frequently asked questions
Do I have to file an amended return for the adoption credit carryforward?
No. The IRS says taxpayers should not need to file an amended return to receive the additional credit. It adjusts 2025 returns on its own.
How will I know the IRS adjusted my return?
The IRS sends a notice, usually within about 30 days of the adjustment. It states the amount and whether you got a refund or the money went to another tax or non-tax debt.
Which carryforwards qualify?
Unused adoption credit carried forward from 2020 through 2024, claimed on your 2025 return. The IRS says the change applies to 2025 only.
Why was my refund not issued yet?
Returns filed on extension, or with identity theft indicators, freezes, dependency conflicts or other issues, are reviewed later in 2026, after processing or once the issue is resolved.
Can the refund be taken for other debts?
Yes. The IRS notice says whether the amount became a refund or was applied to another tax or non-tax debt.
Run your own numbers
- Income tax calculator
Federal and state income tax owed for 2026.
- Estimated tax calculator
Quarterly federal estimated tax (Form 1040-ES): this year's tax, the safe amount from 90% of this year or 100%/110% of last year, withholding and every due date.