Carryforward Adoption Tax Credit Refundable

Carryforward amounts of the adoption tax credit - refundable up to $5,000

During a recent House Ways and Means Committee hearing, IRS CEO Frank Bisignano indicated that, for tax year 2025, carryforward amounts of the adoption tax credit from prior years may be refundable up to $5,000 per qualifying child.

This is great news for adoptive families.

It suggests that families who finalized an adoption prior to 2025 and still have unused adoption tax credit carryforwards may be eligible—upon filing their taxes—to receive a cash refund of up to $5,000 per qualifying child.

The IRS has indicated additional guidance will be published soon but we wanted to flag this development now so families are made aware of the potential opportunity. “The IRS will publish additional information on this very soon. Taxpayers should continue to claim the credit as directed by the current forms and instructions during tax season, since the IRS is pursuing post-filing remedies to resolve this issue."

Other resources to understand the Federal Adoption Credit:

This IRS Adoption Credit webpage provides guidance to determine:

• Who’s eligible

• Qualified expenses

• Exclude expenses from income

• Rules for children with special needs

• When to claim the credit

Welcome to Adopt International

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

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