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Would filing a tax extension get you a bigger third stimulus check? Everything to know

Filing for a tax extension could have an impact on your third stimulus check -- and on any money you're still owed from the first two payments. What to know and how to file an extension with the IRS.

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You can file an extension on your taxes if you don't think you'll meet the due date, but there are details to know.

Sarah Tew/CNET

Filing your tax return early can benefit you financially in many ways. First, if you are missing stimulus money from the first two payments, you can get that quickly by sending in your tax refund right away. Next, you could benefit if you qualify for more money in a third stimulus check if the IRS uses your 2020 taxes instead of your 2019 taxes. But could you benefit if you delay paying your 2020 taxes? Would the IRS send you a bigger third stimulus check in some cases if you knew the IRS would look at your 2019 income to calculate your payment instead of your 2020 AGI?

Before exploring that payment path, be aware there could be some trade-offs you need to know about that could influence when you file. In addition, millions of Americans are expected to file a tax extension this year due to complexities stemming from unemployment insurance, and for businesses, Payroll Protection Program loans, not stimulus checks.

To help you make sense of this, we explain what happens with your missing stimulus money if you request a tax extension this year. Once you do file, here's how to track your combined refund and stimulus payment. We also have details on the $1,400 stimulus check, and how to calculate the total you could get. This story was recently updated.

The first two things to know about filing for a tax extension

If you file for an extension with the IRS, that would change your due date for filing your tax return to Oct. 15. The current deadline is April 15, but Democrats are urging the IRS to extend the date as a result of the COVID-19 pandemic. However, since the only way to get any missing stimulus money is by claiming it on your tax return, what happens if you file a tax extension if you're also expecting a catch-up payment? And what could happen if a third stimulus check arrives before you file your 2020 taxes?

If you decide to extend your tax filing to a later date, you'll need to file the extension no later than April 15, 2021. Note that you'll still have to pay the estimated taxes you owe by the tax due date -- currently also April 15 -- otherwise, you accrue interest on what you owe, which you'll eventually have to pay -- plus other possible penalties -- on top of your income taxes.

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How will a third stimulus check work if it comes during tax season?

The latest proposal (PDF) stipulates that the IRS would use whichever taxes it has on file at the time it's ready to prepare your payment. If you think you'd get a larger check using your 2019 taxes, you could force the issue by filing for an extension, which would cause the IRS to use your 2019 taxes. Or would it? 

If you owe the IRS any money, you'd still have to calculate an estimate of your payment using your 2020 AGI and send in your payment by April 15 -- even if you file an extension. If your 2020 AGI disqualified you from receiving a third check, or granted only a partial payment, could the IRS still use those figures to decide the third check total? We've reached out to the agency for clarification.

Also, keep in mind that income is only one factor. The number of qualified dependents is also an advantage this time around, and would no longer be limited by age.  

Remember, too, that if there's any difference between your 2019 and 2020 taxes, you would need to hold on to your details and claim any missing money a year from now, when filing for your 2021 taxes in 2022, rather than get that payment this year. 

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Figuring out your stimulus check money is anything but simple.

Sarah Tew/CNET

Can I claim my missing stimulus money if I file a tax extension?

Yes. But you should know the only way you'll get your missing stimulus money is by claiming a Recovery Rebate Credit on your tax form -- even if you're not usually required to file taxes. So the longer you wait to file, the longer it'll take to get your tax refund, which will include your missing stimulus payment.

When will I get my tax refund either way?

The timeline for getting your tax refund -- or your refund plus outstanding stimulus check money --  depends on when you file. While you have until Oct. 15 to submit your return if you've filed an extension, it doesn't mean you have to wait that long to file. 

For example, if you filed by Feb. 12 -- that's when the IRS started processing tax returns -- you could receive your money as soon as Feb. 19. However, if you wait until Oct. 15, the earliest you would get the money is Oct. 22. 

See our chart below for more details on when you can expect your tax refund, which will include your missing stimulus payment.

When to expect your tax refund

If you file on this date This is the soonest This is the latest
Feb. 12 Feb. 19 March 5
March 1 March 8 March 22
April 1 April 8 April 22
April 15 (last day to file) April 22 May 6
Oct. 15 (last day with extension) Oct. 22 Nov. 5

Here are your 3 options for filing a tax extension in 2021

There are three ways the IRS says you can file a tax extension:

Option 1: Pay all or part of your estimated income tax due and note the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System, or using a credit or debit card. 

Option 2: File Form 4868 electronically by accessing IRS e-file using your tax software or by working with a tax professional who uses e-file. Make sure you have a copy of your 2019 tax return.

If you need to find a tax software service to use, and you make $72,000 or less, you can use the IRS Free File Online tool to find the best free filing system. You'll need to gather the following information: income statements (W2s or 1099s), any adjustments to your income, your current filing status (single, married, filing jointly) and dependent information. If you make more than $72,000, you'll be able to use the Free File Fillable form when it opens Feb. 12.

Once you enter all your information, the IRS will help determine which option is best for you -- for example, it could be IRS Free File Program by TurboTax or TaxSlayer.

Option 3: File a paper Form 4868 and enclose payment of your estimate of tax due. Make sure it's postmarked on or before April 15.

For more tax information, we spell out the difference between a tax refund and a tax return, how tax season is different in 2021 and three reasons to sign up for direct deposit when you file your taxes.