Adoption Tax Credit Refundable

Tax Credit Refundable up to $5,000

‘OBBB’ was signed into law on July 4, 2025, and the legislation includes a provision that enhances the adoption tax credit.

• The OBBB makes the adoption tax credit partially refundable and indexes it to inflation, allowing parents to claim up to $5,000 in refundable adoption tax credit.

  
  

• Another provision allows Indian tribal governments to determine whether a child has special needs for the adoption credit.

  
  

• The amendments apply to taxable years beginning after December 31, 2024.

More information to come from the IRS concerning the refundable credit.

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If you found this article useful, you might also find this useful: Adoption Tax Credit 2025, Adoption Tax Credit FAQs, What is open adoption?

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