An object of the present invention is to provide a method for producing an alloy recycled material by effectively removing carbon from a carbon-containing alloy, which is produced as scrap or sludge of an R—Fe—B based permanent magnet, a used magnet, or the like. The method of the present invention as a means for resolution is characterized in that a carbon-containing R—Fe—B based permanent magnet alloy is subjected to an HDDR treatment to remove carbon. An alloy recycled material produced by the method of the present invention contains a reduced amount of carbon. Therefore, in the case where it is recycled for the production of a magnet, even when an increased amount is subjected to high-frequency heating in a vacuum melting furnace, a non-negligible increase in the amount of carbon contained in the produced magnet can be avoided.