Hundreds of thousands of American families could qualify for refunds of up to $5,000, according to Frank Bisignano, the chief of the Internal Revenue Service (IRS). On March 15, 2025, Bisignano announced that the agency would carry forward amounts from the Adoption Tax Credit from previous years. This allows eligible families to receive substantial refunds for qualifying children adopted during the tax year.
The announcement is significant because it could benefit many families. Estimates suggest that between 100,000 and 150,000 children are adopted annually in the United States. The IRS has previously emphasized that this year’s tax refunds are expected to be higher than average, a claim supported by the Trump administration. Typically, tax refunds occur when individuals pay more in federal taxes than they owe, often due to payroll withholding or qualifying for refundable credits.
Understanding the Adoption Tax Credit
Bisignano informed lawmakers that many Americans might still be entitled to large refunds due to unclaimed credits or filing errors. He encouraged taxpayers to ensure they are not overlooking potential financial benefits. His comments come in the wake of ongoing misinformation regarding new federal stimulus payments, often referred to as “$5,000 checks.” The IRS has clarified that no new federal stimulus program has been approved, but existing tax credits can still provide substantial refunds for eligible taxpayers.
Currently, the maximum Adoption Tax Credit stands at $17,280, with up to $5,000 of that amount being refundable. This applies to taxpayers who have adopted or initiated the adoption process for children under the age of 18, provided they incurred qualifying adoption-related expenses. According to Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, the costs associated with adoption can be substantial. “Adoption can be incredibly expensive, whether it occurs in the United States or abroad,” Beene stated. He added that receiving an additional refund can significantly alleviate these financial burdens.
What Comes Next for Taxpayers
Tax professionals advise Americans to carefully review their tax filings, particularly those who may have missed out on stimulus payments during the pandemic or who are low- to moderate-income workers that did not claim refundable credits. Individuals who have not filed tax returns for previous years or who relied on unverified online advice could also benefit from refunds they were previously unaware of.
Bisignano expressed that the IRS aims to implement this new policy without disrupting the current filing season. “The IRS is implementing this policy as expeditiously as possible without disrupting the current filing season,” he said in a recent statement.
Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast, remarked, “The adoption tax credit has always been well-intentioned, but its structure limits how helpful it actually is for many families.” He pointed out that adoption costs are typically incurred upfront, making the timing of the credit less beneficial for families facing immediate financial pressures.
As the IRS prepares to release further details about the availability of Adoption Tax Credit refunds, families considering adoption are encouraged to stay informed and consult with tax professionals to maximize their potential benefits.
