IRS starts automatic refunds for over 50,000 taxpayers with adoption tax credit carryforward

Check your mail if you claimed the adoption tax credit in prior years. The Internal Revenue Service just started issuing automatic refunds to over 50,000 taxpayers who benefited from the adoption tax credit carryforward, according to Accounting Today. The Treasury Department recently clarified its interpretation of the One Big Beautiful Bill Act, affecting the adoption tax credit for tax year 2025. Under the new rule, adoption tax credit carryforwards from 2020 through 2024 can increase the amount of the adoption tax credit that is refundable in 2025, subject to a $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," said IRS CEO Frank Bisignano in a statement. Affected taxpayers do not need to file an amended return or take any action to receive the additional credit. The IRS will adjust accounts automatically and send a notice within 30 days explaining the amount and whether it is a refund or applied to another tax debt. The refunds started in late September and the IRS anticipates finishing the process for most eligible taxpayers by the end of the year. If you filed before April 15, 2026, your adjustment should happen automatically, while accounts with freezes or identity theft indicators will be reviewed later in 2026. For your business or family budget, that means unexpected cash arriving directly from the federal government without you lifting a finger.