A Daily Network publication
Explore the network
Wealth Advisor Daily
The advisor's edition — practice, portfolio, and the book.
Friday, October 16, 2026The Morning Brief →Sign in
The Book

IRS starts automatic refunds for more than 50,000 adoption tax credit carryforward filers

Notices generally go out within 30 days of the account adjustment, and the agency says no amended return is needed.

At a glance

20-second brief
  • More than 50,000 taxpayers who claimed the adoption tax credit carryforward in prior years are receiving automatic refunds from the IRS.

  • The IRS is adjusting affected accounts and issuing any resulting refunds, and it says taxpayers should not need to file an amended return.

  • Adjustments and refunds began in late September and will continue until complete, according to the announcement.

More than 50,000 taxpayers who claimed the adoption tax credit carryforward in prior years are receiving automatic refunds from the IRS. The agency expects the refund process to be complete for most eligible taxpayers by the end of the year.

The change follows a Treasury Department clarification of how the Working Families Tax Cuts apply to the adoption tax credit. For tax year 2025 only, carryforwards from prior tax years, 2020 through 2024, can increase the amount of the credit that is refundable, subject to the $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,” IRS Chief Executive Officer Frank J. Bisignano said. He said the administrative change would help families access the tax benefits they are entitled to as quickly and simply as possible.

Notices and adjustments

The IRS is adjusting affected accounts and issuing any resulting refunds, and it says taxpayers should not need to file an amended return. Notices generally go out within 30 days of the adjustment, stating the amount and whether the adjustment produced a refund or was applied toward another tax or non-tax debt. The agency tells taxpayers to review the notice, compare it with their 2025 return and keep it with their tax records.

Adjustments and refunds began in late September and will continue until complete, according to the announcement. Taxpayers who filed their 2025 return before April 15, 2026 will generally receive any applicable adjustment automatically. Those who filed under an extension, or whose accounts have identity theft indicators, freezes, dependency conflicts or other issues, will be reviewed later in 2026, after the return is processed or the account issue is resolved.

Continue your research

Save this analysis and keep the funds you follow together in My Desk.

Sign in to save articles or follow funds.
Sources & further reading
IRS Newsroom
More from Wealth Advisor Daily
The Book

F&G survey: 51% of pre-retirees plan to semi-retire rather than stop working

Only 21% equate retirement with quitting work outright, and 51% expect to retire later than originally planned.
The Book

Focus Partners Wealth’s Jeffrey Levine tells advisors to keep college savings in 529 plans

Distributions from Trump Accounts are generally taxable at 18, while 529 withdrawals for college are tax-free, Levine says.
The Advisor's Note

Schwab raises tax-aware long-short account minimum to $10 million

The accounts represented $60.7 billion of Schwab's $187.9 billion in client margin loans at the end of September.
Elsewhere in the networkAll titles →
Every weekday · 6:30 a.m. ET

The Morning Brief

The latest from Wealth Advisor Daily, in your inbox every weekday. Free.