According to the IRS, some families who received their child tax credit advance payments by direct deposit in July may still be waiting for their August payments due to an allocation mix-up.

The second round of child tax credit advance payments was processed last Friday (August 13), but nearly 15% of recipients who were expecting their direct deposit on that date have not yet seen their benefits. Instead, nearly 5.4 million households will receive their benefits in paper checks this month, despite the fact that they were deposited into their accounts in July.

Mailed checks can take an extra week or two to arrive, compared to electronic deposits into recipients' bank accounts, and the IRS says the problem will likely be resolved by the next payment date of September 15.

As a reminder, these advance payments are part of the provisions of the Biden administration-sponsored American Rescue Plan Act, which expanded the eligibility requirements for the child tax credit for 2021 and increased the credit amount.

Eligible families also have the option of making monthly cash advances of up to half of their child tax credit from July through December of this year.

The monthly payments are up to $300 per child under age 6 and $250 per child ages 6 to 17 for taxpayers earning less than $75,000 (single filers) or $150,000 (married filers) per year. Above these income levels, the payments are phased out.

Higher-income families with dependent children earning up to $400,000 per year may qualify for the regular child tax credit of $2,000 per child under age 17.

If you have not yet received your July and August payments by direct deposit and would like to, or need to change your bank account information, now is the time.

If a family is receiving an advance payment of the Child Tax Credit and would like to receive the September 15 payment by direct deposit, they must change their information in the Child Tax Credit Update Portal by August 30.

Also, if you did not receive a child tax credit payment in July but believe you are eligible, the IRS may not have processed your tax return or there may have been a discrepancy between your individual taxpayer identification number and your child's Social Security number.

Even if the IRS resolves these issues, you will still receive the full amount of the deduction-your monthly payment will be slightly higher than usual because the cash is distributed over a smaller number of months.

Bottom line: file your 2020 tax return and check with the IRS to make sure your account transfer information is current.