The Internal Revenue Service has already begun paying refunds to more than 50,000 taxpayers who carried an adoption tax credit forward from earlier years. Nobody has to file anything to get one. The agency says no amended return is needed.

The payments were announced October 16 in IRS release IR-2026-123. Refunds and adjustments began in late September and will continue until the work is complete, and the IRS expects most eligible taxpayers to be finished by the end of 2026.

Why is the IRS paying adoption-credit refunds without being asked?

The change comes from the Working Families Tax Cuts law. The Treasury Department clarified how it reads the adoption credit provision in that law. Under that reading, for tax year 2025 only, adoption credit carryforwards from prior tax years can increase the amount of the credit that is refundable.

A carryforward is the part of the adoption credit a family could not use in the year the adoption costs were claimed, so it was pushed ahead to later returns. The IRS release says the carryforwards at issue come from tax years 2020 through 2024. Before this reading, those leftover amounts could not raise a refund. Now, for 2025, they can.

The IRS is applying the change on its own, using the returns it already has. That is why the agency says taxpayers should not need to file an amended return to receive the additional credit.

Who should expect an adjustment, and who will wait?

The people most likely to see a payment are those who claimed the adoption credit and carried part of it forward from 2020 through 2024, then filed a 2025 return. A family that adopted a child several years ago and spread the credit over more than one return fits that description. The IRS says anyone who filed a 2025 return before April 15, 2026 generally receives any applicable adjustment automatically.

The refundable portion is limited. The release names a limit of $5,000 per qualifying child, so the extra amount cannot push the refundable credit past that cap for any one child. The release does not say how large the typical payment is.

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What about people who filed late or have an open problem?

Not everyone is in the first wave. The IRS says taxpayers who filed under an extension, and those whose accounts show identity theft indicators, freezes, dependency conflicts or other issues, will be reviewed later in 2026. That review comes after the return is processed or the issue is resolved.

For a household in that group, the IRS has not given a date. The agency’s stated target is that the process for most eligible taxpayers will be done by the end of the year, which leaves the extension filers and flagged accounts to follow.

The IRS also did not say in its release whether the money arrives by check or direct deposit. A family waiting on a refund should expect the notice described below to carry the details for its own account.

What does the IRS notice say?

The IRS says it will send a notice, generally within 30 days of the adjustment. Each notice states the amount and whether the adjustment produced a refund or was applied to another tax debt or to a non-tax debt. That second possibility matters for people who owe the government money, because an adjustment can be absorbed by a balance instead of landing in a bank account.

The agency tells taxpayers to check the notice against their 2025 return and keep it with their tax records. IRS Chief Executive Officer Frank J. Bisignano said that by issuing refunds without requiring an amended return, the IRS is reducing the financial burden on families who adopted a child.

The agency points taxpayers to the adoption credit page on IRS.gov for more on the credit itself. A notice that does not match the 2025 return, or a refund that never shows up after a notice says it was sent, is the point where a family needs a paper trail.

Will the notice match the refund?

That is the open question for the 50,000 families already paid and for the many who have not yet heard anything. The IRS has said the work runs through the end of 2026, and the notice is the only document that tells a taxpayer what the agency did with a carried-forward credit.

The IRS has said that every notice states the amount and where the money went. A taxpayer who holds a notice should compare that amount with the carryforward shown on the return, and file the notice with the rest of the year’s tax papers.

Holding an adoption-credit notice that does not add up?

A family that carried an adoption credit forward may get a notice within 30 days of the adjustment, and a notice can show the money went to another tax or non-tax debt instead of a refund. Missing that detail can leave a household assuming a payment is coming when it is not.

The IRS Refund Recovery Kit includes a notice decoder and a refund status tracker spreadsheet, with a Refund Status and Notice Tracker in Excel and a part on why a refund stalls, so each IRS letter can be matched to what it says.

Get the notice decoder and refund tracker for the adoption-credit adjustment →

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This article was produced with AI assistance and edited for accuracy against the sources linked above.