California Wildfire Victims Receive Tax Relief by Karen A. Lake, CPA
Posted on January 28, 2025
by
Karen Lake
The IRS has issued tax relief to individuals and businesses affected by the devastating wildfires in southern California. Taxpayers who live in or own a business in a federally declared disaster area automatically receive an extension to file various federal tax returns and make tax-associated payments originally due between Jan. 7, 2025, and Oct. 15, 2025, by Oct. 15, 2025.
This tax relief currently includes individuals and businesses located in Los Angeles County. The filing extension may expand to other jurisdictions the president declares as federal disasters in the future. It also applies to the following taxpayers:
- Businesses that do not have operations in the covered disaster areas but do maintain records there;
- Estates and trusts that have records required to meet their tax filing and payment deadlines located anywhere in the affected county;
- Spouses of affected taxpayers who file joint tax returns; and
- Individual relief workers assisting in a covered disaster area, regardless of whether they are affiliated with recognized government or philanthropic organizations.
The Oct. 15, 2025, extension applies to the following taxpayer responsibilities:
- Individual income tax return filings and payments normally due on April 15, 2025.
- 2024 contributions to IRAs and health savings accounts for eligible taxpayers.
- 2024 quarterly estimated income tax payments typically due on Jan. 15, 2025, and estimated tax payments usually due on April 15, June 16 and Sept. 15, 2025.
- Quarterly payroll and excise tax returns normally due on Jan. 31, April 30 and July 31, 2025.
- Calendar-year partnership and S corporation returns typically due on March 17, 2025.
- Calendar-year corporation and fiduciary returns and payments usually due on April 15, 2025.
- Calendar-year tax-exempt organization returns ordinarily due on May 15, 2025.
Any penalties assessed for failing to make payroll and excise tax deposits due on or after Jan. 7, 2025, and before Jan. 22, 2025, will be abated provided deposits were made by Jan. 22, 2025. If an affected taxpayer receives a late filing or late payment penalty notice from the IRS for an original or extended filing, payment or deposit due date that falls within the postponement period, the taxpayer should call the telephone number on the notice to have the IRS abate the penalty.
Qualified disaster relief payments received from a government agency, such as FEMA, for reasonable and necessary family expenses, including repair or rehabilitation of their homes or for repairing or replacing of its contents, are excluded from recipients’ gross income. Applicable taxpayers who incurred casualty losses due to wildfires and gusting winds can claim a disaster-related casualty loss on their 2024 or 2025 federal income tax returns. Additional relief may be available to affected taxpayers who participate in a retirement plan or IRA, who may avoid a 10 percent penalty on eligible early distributions and allow the income to be spread over three years. Please consult your tax advisors to determine which forms of relief are best suited to your unique needs and circumstances.
About the Author: Karen A. Lake, CPA, is a state and local tax (SALT) specialist and an associate director of Tax Services with Berkowitz Pollack Brant Advisors + CPAs, where she helps individuals and businesses navigate complex federal, state and local tax laws, and credits and incentives. She can be reached at the firm’s Ft. Lauderdale office at (954) 712-7000 or info@bpbcpa.com.
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