Senator Kevin Cramer has announced a change in the Adoption Tax Credit. “During a hearing today in the House Ways & Means Committee, IRS announced the change in policy,” his website says.
It goes on to quote Frank Bisignano, the CEO of the IRS: “After reviewing this issue, I am pleased to announce that for tax year 2025, carryforward amounts of the adoption tax credit for prior years are refundable up to $5000 per qualifying child and the IRS is implementing this policy as expeditiously as possible without disrupting the current filing season. 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.”
What does that mean?
The change means that starting with tax year 2025, families will actually be able to get cash back from old, unused adoption tax credit amounts—up to 5,000 dollars per child—rather than just carrying them forward forever and often never using them.
In the past, the adoption tax credit was basically non‑refundable, meaning that it reduced taxes but did not lead to refunds beyond the amount owed. You could use it to bring your federal income tax bill down to zero. But if your tax bill was smaller than your credit, the extra just carried forward to future years, and many lower‑ and middle‑income families never got the full benefit.
For 2025, the IRS is saying: if you still have carryforward amounts from earlier years (unused adoption credit sitting on your prior returns), you will be able to treat up to 5,000 dollars per qualifying child as refundable.
“Refundable” means that even if your tax liability for 2025 is zero, you can still get that amount as an actual refund check or direct deposit.
Anything above that 5,000‑dollar refundable portion would still behave like an ordinary, non‑refundable credit (reduces tax, can be carried forward, etc.), subject to whatever the final rules say.
Post‑filing remedies
The change in the Adoption Tax Credit will not happen immediately. For the current filing season, just keep filling out the adoption credit forms the old way. The IRS will later create a mechanism (possibly an extra form, amended return process, or automatic adjustment) to identify taxpayers with carryforward adoption credits and send them the refundable amount for 2025, once the system is ready.
So the practical impact for adoptive families is that, if you have unused adoption credit from earlier years, you may actually see that remaining credit turned into cash, instead of watching it expire unused. You don’t have to do anything special yet; the IRS is going to clarify exactly how you’ll claim or receive that refundable portion once they finish the guidance and programming.
When it comes to taxes, consult your tax professional. When it comes to adoption questions, consult Heimer Law. We are adoption specialists.
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