Stimulus Update: Missing Your August Child Tax Credit Direct Deposit Payment? This May Be Why

Missing your direct deposit payment for August's Child Tax Credit? An IRS glitch may have caused the problem. Here's what might have happened to your money.

The IRS just began issuing the August Child Tax Credit payment last week, but the federal agency has already mailed out or directly deposited tens of millions of checks into bank accounts across the nation. Thus far, about 36 million American families have been on the receiving end of the payments from the second batch of monthly advance tax credits, which are worth about $15 billion in total.

The direct monthly payments, which are worth $250 to $300 per dependent, just began rolling out in July as part of President Joe Biden's American Rescue Plan, but the money has already proven to be a big help to lower- and middle-income families across the country. A recent study showed that food insecurity and financial hardships decreased shortly after the July Child Tax Credit payment was issued -- a trend that is likely to continue over the next few months.

But, while millions of households have already received their August tax credit payments, not every family has been so lucky. Some families who received direct deposit payments for July are now missing their August direct deposits, despite the IRS having their bank account information on file. The good news is that the issue isn't permanent, and the money will be on the way in the near future. If you're one of the families who's missing their August Child Tax Credit payment, here's what you should know.

Why some families are missing their Child Tax Credit direct deposits

Most Child Tax Credit payments are made by direct deposit, though there are millions of paper checks issued by the IRS each month for the advance payment. If you received your July Child Tax Credit payment directly to your bank account, you likely expected to receive your August payment in the same way. But, that may not be the case this month.

Per the IRS, some families who received a July direct deposit for their payments will not be receiving a direct deposit payment for the month of August. These families will have to wait to get their payments by paper check, which comes via USPS, instead.

This issue, which was reportedly caused by a system glitch, affected about 15% of the people who were slated to receive direct deposit payments for the August Child Tax Credit money. So, if you're wondering where your August payment is and you received your first payment by direct deposit, the glitch may be to blame.

The good news is that the issue appears to be temporary. If your bank account information is on file with the IRS, your payment for September should be made via direct deposit, just like it was in July. The bad news is that it can take a lot longer to receive your paper check, so if you were relying on the money to pay an essential bill or buy groceries, you may be looking at a much longer wait than normal.

It isn't uncommon for paper checks to take an extra week or two to arrive in your mailbox after they're issued. So, if you're missing your direct deposit, be sure to keep an eye out for an envelope from the IRS, which will likely land in your mailbox by the end of the month.

Who receives the Child Tax Credit payments via direct deposit

Not sure whether you were supposed to receive your payment via direct deposit for August? You are typically slated to receive your Child Tax Credit payments by direct deposit if your bank account information is on file with the IRS. Your bank account information is updated with the IRS via your:

• 2019 or 2020 tax return
• The IRS Child Tax Credit Non-filer Sign-up Tool
• Another federal agency that provides benefits to you, including the Social Security Administration, VA, or the Railroad Retirement Board

If your bank account information is not on file with the IRS by one of these three methods, you'll likely get a paper check in the mail if you qualify.

How to track payments or update your information with the IRS

If you want to track your payment, you can use the IRS Child Tax Credit Update Portal to get information about where your money is -- and whether your August payment has been issued. Note, though, that if you've created an IRS username or ID.me account in the past, you'll need your login information to check on your payment. If you don't have an account, you can create one on the login page.

If you are a non-filer and think you may qualify for the advance Child Tax Credit payments, you can use the IRS non-filer portal to make sure the IRS has your information on file. You'll need to provide your name, mailing address, birth date, the Social Security number for you and your dependents (or your other taxpayer ID), and your bank account and routing information to the IRS to take advantage of the monthly payments.

If you had a loss of income recently or have added a new dependent to your household, you may also need to update the information on file with the IRS. You can do that via the non-filer portal. It's important to make sure that the information on file with the IRS is up to date as it could affect your eligibility for the advanced payments or increase your monthly Child Tax Credit payment.