GOP Expanded Adoption Credit, Now IRS Is Cracking Down: BGOV Tax

Adoption Credit Expansion Gets IRS Scrutiny

Republicans expanded the adoption tax credit in their massive 2025 tax-and-spending law, but now the IRS is cracking down on it, Erin Slowey reports.

The credit, created in 1996, helps families with the costs associated with adoption, and became partially refundable last year. Families could claim a maximum of $17,670 with up to $5,120 refundable in the 2026 filing year. The non-refundable portion of the credit can also be carried forward for a maximum of five years.

That change caused the IRS to alter its enforcement strategy, focusing on shrinking improper payments and ...