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IRS sends $15B in second round of Child Tax Credit payments amid technical issues

Yahoo Finance’s Denitsa Tsekova breaks down the second round of the Child Tax Credit payment and more lawsuits mounting against states canceling federal unemployment programs.

Video Transcript

JARED BLIKRE: Welcome back to "Yahoo Finance Live." I'm Jared Blikre. Well, the second round of child tax credit payments have gone out with a few snags. And here with the details, we have Yahoo Finance's Denitsa Tsekova. And I understand this is $15 billion worth, no small chunk of change, and then we hit a few snags, as I was alluding to. What happened here?

DENITSA TSEKOVA: Yeah, well, maybe we can start with the good news, $15 billion to 61 million children-- families of 61 million children-- went out today. This is the second round of payments. Each family can expect an average payment of $420. Of course, that varies.

The really good news is that the number of August payments increased to cover additional 1.6 million children compared to last month. And we've talked a lot about the families of approximately 4 million children, mostly low-income families, that are not getting the payments automatically. So potentially, that increase means that a lot of low-income families that weren't getting the payments automatically got them. And for them, obviously, that support is really important.

And these are the good news. There have been some issues, unfortunately. The majority of the CDC payments are directly deposited into Americans' accounts, but we have seen some issues this time. Due to a technical issue, less than 15% of families that received the first payment by direct deposit are now getting a mailed paper check. Obviously, this takes a little bit more time, so some families may be frustrated to get their payments a little bit later than last time. But the Treasury said that this will be resolved by the time the next month's payments are disbursed. Of course, there are four more payments. Those payments are continuing through December, and they normally happen around the 15th of the month.

KRISTIN MYERS: All right, Denitsa, I want to pivot slightly here and talk now about unemployment benefits because we have seen several states essentially cut them off for some of the unemployed workers within their state, and now there have been lawsuits filed against some of those states because of that. Can you tell us a little bit more about that?

DENITSA TSEKOVA: Yeah, some of those workers may actually continue to get unemployment checks. So I guess on top of the CDC payments, they may be getting other payments. What we see is 11 lawsuits have been filed. As a reminder, 26 states opted out of the program earlier-- out of the federal employment programs. So 11 out of 26 states are already suing.

The lawsuits have met mixed success. Four states have been successful. Oklahoma was the latest state ordered to reinstate the benefits, at least temporarily. We've also had three states where the lawsuits have been denied by judges. West Virginia was the latest one where the request for a temporary restraining order was rejected. And the latest lawsuit we've seen was in Missouri.

And as a reminder, obviously, those state's benefits expired in the last few months. But overall, most of the pandemic-era unemployment benefits are expiring also very soon, on September 6. So on top of the workers that lost their benefits in the last few weeks, even more are going to lose their benefits in September. So we continue to follow that as well.

JARED BLIKRE: And I got to tell you, on a related note, I still know people who haven't gotten their regular tax refunds yet. Denitsa Tsekova, thank you for joining us and sharing that update with us.