The IRS has begun issuing automatic refunds to more than 50,000 taxpayers who claimed an Adoption Tax Credit carryforward from prior years on their 2025 return.

What changed

• For tax year 2025 only, adoption credit carryforwards from 2020 through 2024 can increase the refundable portion of the credit, up to $5,000 per qualifying child.
• The IRS is adjusting accounts directly. Taxpayers generally should not need to file an amended return.
• Adjustments began in late September 2026, and the IRS expects most to be completed by the end of 2026.
• If you filed your 2025 return before April 15, 2026, any adjustment should generally happen without action on your part. Returns filed on extension, or accounts with identity-theft flags, freezes, or dependency issues, will be reviewed later in 2026.

What to watch for

The IRS generally sends a notice within 30 days of an adjustment showing the amount and whether it was refunded or applied to another debt. Compare it to your 2025 return and keep it with your tax records.

How we can help: If you receive one of these notices and it does not match what you expected, send us a copy and we will review it. Contact Teddy Accounting Services to talk it through.

Source: IRS news release IR-2026-123