Families who claimed the federal adoption tax credit may get up to $5,000 per child.
The IRS has started issuing refunds to more than 50,000 U.S. taxpayers with unused adoption tax credits, including some families in New Jersey. Checks began going out earlier this month.
The refunds are worth up to $5,000 per qualifying child—eligible families don’t have to file anything to receive them.
What Changed
The adoption tax credit used to be nonrefundable. It could offset taxes owed but couldn’t produce a tangible refund, meaning some lower-income families watched unused credit carry forward for years. Under the Treasury Department’s new interpretation of the Working Families Tax Cuts, the IRS is now refunding the unused portion for tax year 2025.
“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,” IRS Chief Executive Officer Frank J. Bisignano said.
Here’s how Patch lays it out: A couple who adopted in 2022 qualified for a $14,000 credit and used $9,000 over the ensuing years. That leftover $5,000 could now come back to them in the form of a refund—and there’s no application needed.
Who Qualifies
To qualify, a taxpayer must have:
- Adopted a qualifying child and claimed the federal adoption tax credit
- Carried forward unused adoption credits from 2020 through 2024
- Claimed those carryforwards on their 2025 federal return
Worth knowing: $5,000 is a cap, not a guarantee. The amount depends on each taxpayer’s available credit, and an adjustment can be applied toward an outstanding tax or non-tax debt instead. The IRS will review extension filers and accounts with unresolved issues, such as identity theft flags or dependency conflicts, later.
What to Expect
The IRS generally sends a notice within 30 days of an adjustment, explaining the amount and whether it became a refund. Compare it with your 2025 return and keep it with your tax records. The IRS expects to finish most payments by the end of the year. You can check your status through an IRS Individual Online Account.
For more on the credit, visit the IRS adoption credit page.
Lifelong Jersey resident and Rutgers and FDU alumnus, Tom La Vecchia is publisher of New Jersey Digest, one of the state’s leading lifestyle media brands. When he’s not growing the Digest, he’s raising four kids, wrangling four cats and pretending it’s all under control. His mission: keep Jersey interesting and impossible to ignore.
