The IRS announced on Oct. 16, 2026, that it has begun issuing automatic refunds to more than 50,000 taxpayers who benefited from the adoption tax credit carryforward. The agency expects the refund process for most eligible taxpayers to be complete by the end of the year, and says taxpayers should not need to file an amended return to receive the additional credit, according to the IRS announcement.

What changed for 2025 adoption credit carryforwards

Beginning in tax year 2025, up to $5,000 of the adoption credit can be refundable per qualifying child. Unused nonrefundable amounts can be carried forward for up to five years. IRS adoption credit page The IRS lists this change as Section 70402 of the Working Families Tax Cuts; its February refundability fact sheet refers to the same law as the One Big Beautiful Bill Act, P.L. 119-21.

The 2025 Form 8839 instructions, as issued, say any carryforward can only be a nonrefundable credit. The IRS's Working Families Tax Cuts page and its February fact sheet (FS-2026-03) still say carryforwards can't be used for the refundable portion; the Oct. 16 release and the Oct. 8 FAQ change that for tax year 2025 only. Treasury has now clarified its interpretation: for tax year 2025 only, carryforwards from tax years 2020 through 2024 can increase the refundable part of the 2025 credit, still subject to the $5,000 per-child limit. IRS announcement

Refunds and adjustments began in late September and will continue until complete. IRS announcement

The 2025 forms and instructions will not be updated. Instead, the IRS is adjusting eligible accounts systemically. Carryforwards from before 2020 have expired, and when you have carryforwards from more than one year, the oldest is used first. IRS carryforward FAQ

Who may get an automatic adjustment

According to the IRS FAQ, you may receive the adjustment if all of these apply:

  • You filed a 2025 Form 1040, 1040-SR or 1040-NR.
  • You claimed, or were eligible to claim, the adoption credit on Form 8839.
  • You had prior-year adoption credit carryforwards available for use in 2025.
  • Your 2025 return and account information show that your refundable credit should increase.

No adjustment is made if you already received the correct refundable credit, have no carryforward available for 2025, or the IRS lacks enough information, for example because you did not file a 2025 return. IRS FAQ

Taxpayers who filed their 2025 return before April 15, 2026, will generally receive any applicable adjustment automatically. Extension filers, and accounts with identity theft indicators, freezes, dependency conflicts or other issues, will be reviewed later in 2026, after the return is processed or the issue is resolved. IRS announcement

How much the adjustment can be

A $5,000 refund is not guaranteed. The IRS says the result depends on your allowable credit, the carryforwards available for 2025, the number of eligible children, income limitations, other adoption credit rules, payments, other credits, and any balance due or offset. The adjustment may produce a refund smaller than the maximum, a reduced balance due, or no refund. It does not change your adjusted gross income, taxable income or qualified adoption expenses. IRS FAQ

If a refund does arrive, our guides to emergency-fund planning, the debt snowball and avalanche methods and high-yield savings accounts explain common ways households think about extra cash.

What the IRS notice means and how to check it

The IRS says affected taxpayers will receive a notice, generally within 30 days of the adjustment, showing the amount and whether it produced a refund or was applied to another tax or non-tax debt. Review it, compare it with your 2025 return, and keep it with your tax records. IRS announcement

If you agree with the change, you do not need to respond. If a balance remains after the adjustment, you are still responsible for paying it. Where interest is required by law, it is included in the refund. If an offset reduced the refund and you believe your spouse is entitled to part of it, you may be eligible to file Form 8379, Injured Spouse Allocation. IRS FAQ

Where's My Refund? will not show this type of adjustment. Instead, check your IRS Online Account or a tax account transcript; a copy of the notice is also available through Online Account. The IRS asks taxpayers not to call unless a notice or letter tells them to. IRS FAQ

Our guide to the IRS mobile app explains which Online Account features it offers on a phone. Because refund news can attract impersonators, our IRS tax data security reminder covers how to verify a message through a trusted route.

When an amended return may still be needed

Do not file an amended return solely to request this adjustment. Complete the 2025 Form 8839 as issued, without altering the form, and preparers are told to use the forms and instructions as issued rather than override them. IRS FAQ

Form 1040-X may still be needed in these cases, according to the IRS FAQ:

  • You claimed the credit but did not enter your carryforward, so the IRS may lack the information it needs.
  • You did not claim the credit on your 2025 return. If you filed a Form 8839 for 2020 through 2024 that showed a carryforward, you may still receive the automatic adjustment; if the IRS lacks enough information, you may need Form 1040-X with Form 8839.
  • You need to correct another item, such as filing status, income, dependents, qualified adoption expenses, employer-provided adoption benefits, your carryforward amount or another credit.
  • You disagree with the adjustment, in which case you may need to file Form 1040-X with Form 8839 and any required supporting information.

An unresolved account issue generally does not require an amended return just for this adjustment. The IRS will also not automatically reduce an estimated tax penalty; you may request abatement by following your penalty notice or by filing Form 843. IRS FAQ

What it means for your 2026 return

This treatment applies to tax year 2025 only. It does not make adoption credit carryforwards refundable again in 2026, and the carryforward available for future years may be reduced. IRS FAQ

To recompute your 2025 carryforward to 2026, complete the Nonrefundable Adoption Credit Carryforward Worksheet—Line 18 in the 2025 Form 8839 instructions. On line 8 of that worksheet, enter the sum of your 2025 Form 8839 line 18 and the increase in your refundable credit shown on your notice or transcript. Do not use the total refund, reduced balance due or amount due shown on the notice. Keep the notice, transcript and corrected worksheet with your 2025 return, Form 8839 and adoption expense records. IRS FAQ

This content is for general education and is not financial or tax advice.