Paste a paragraph in Photoshop

I am trying to copy and paste a paragraph and only get a single line and not the paragraph here are the steps I take:
- Copy text
- select text tool
- drag text box
- paste text
I get all the words but bunched in one line. I have tried selecting the text layer and selecting Convert to Paragraph and it does nothing. I am sure there is a single option or button I am missing. I can only type titles not a wrapping paragraph in the box like I want please help.

It wouldn't need carriage returns.  It should auto wrap according to the size of the text box.
One way that would prevent it from wrapping would be if the font size was too small for it to reach the right edge of the text box.  If that is the case, double click the type layer to select all the text, and increase font size. 
If still not working for you, upload a screen grab.  If using windows 7 or 8, the Snipping tool is an easy way to do that

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