$5K In Tax Refunds Being Sent NJ Families: See If You Qualify

Roughly 50,000 families are getting a minimum of $5,000 in tax refunds, including some in New Jersey.

Last week, the Internal Revenue Service (IRS) began issuing refunds to families who benefited from the adoption tax credit carryforward.

In other words, families who adopted one or more children and had unused tax credits from between 2020 and 2025 can see a refund of those tax credits, up to $5,000 per child.

For example, say a couple who adopted a child in 2022 had qualified for a $14,000 adoption tax credit. They used $9,000 to offset federal income taxes over several years, leaving them with $5,000 in 2025.

Under the IRS's new interpretation, that family could potentially receive that remaining $5,000 as a refund, assuming they meet the applicable requirements.

Before the reinterpretation, the credit was nonrefundable, meaning it could be used towards taxes that were owed, but it wouldn't generate an additional refund. Some low-income families who did not owe taxes could see that credit carry on for years, unused.

“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,” said IRS Chief Executive Officer Frank J. Bisignano. “This administrative change will help families access the tax benefits they are entitled to as quickly and simply as possible.”

To qualify, recipients will have had to:

• Adopted a qualifying child and claimed the federal adoption tax credit,
• Had unused adoption tax credits carried forward from 2020 through 2024,
• Claimed those carryforwards on their 2025 federal tax returns.

For qualifying recipients, no action is needed. Affected taxpayers can expect notices from the IRS, generally within 30 days of the adjustment, informing them of the amount and whether the adjustment resulted in a refund or was applied towards another tax or non-tax debt, according to federal officials.

The IRS expects all payments to be completed by the end of the year.

Taxpayers can click here to learn more about the adoption tax credit, or check their refund status by creating an IRS Individual Online Account.

According to the Department of Children and Families, adoption rates in New Jersey have been on the decline. There were 514 children adopted in 2021, compared with 385 in 2024, the department said.