Important Tax Relief Updates for California Wildfire Victims

This article is for informational purposes only and should not be considered tax advice. Please consult with a qualified tax professional to discuss your specific situation.

In response to the devastating wildfires and straight-line winds affecting communities across California, the IRS announced several forms of tax relief for impacted individuals and businesses – i.e., those who reside in, or have a business/work in, Los Angeles County. These measures aim to provide additional time and resources for those recovering from these tragic events. Here are some key updates and extended deadlines, along with resources to help you stay informed.

Tax Filing and Payment Extensions
The IRS has extended deadlines for filing tax returns, making payments, and performing certain other time-sensitive acts for taxpayers in federally declared disaster areas. These extensions apply to individuals, businesses, and other entities directly impacted by the wildfires.

Key Deadlines Postponed
For affected individuals and businesses, most returns and payments falling due between January 7, 2025, and October 15, 2025 have been extended to October 15th. This includes (but may not necessarily be limited to) the following:

• 2024 income taxes,
• 2024 Q4 individual income tax estimates,
• 2025 income tax estimates,
• 2024 gift taxes,
• estate tax returns,
• payroll and excise taxes, and
• 45- and 180-day deadlines for Section 1031 exchanges

For a detailed list of affected deadlines and additional tax relief measures, visit the IRS California Wildfire Tax Relief Page.

Claiming Disaster Losses
If you suffered damage or loss due to the wildfires, you may be able to claim these losses on your federal tax return. Taxpayers in disaster areas have the option to claim disaster-related casualty losses on their current or prior-year tax return, which can expedite tax refunds. The IRS has published the below resources to help you navigate the process:

• Disaster assistance and emergency relief for individuals and businesses
• Publication 547 (2023), Casualties, Disasters, and Thefts

Additional State-Level Relief
In addition to IRS relief, the California Franchise Tax Board (FTB) is also providing extended deadlines and support for state tax filings. Visit the California FTB Disaster Relief Page for more details on state-specific relief measures.

How to Qualify for Tax Relief
Taxpayers do not need to apply for this relief; the IRS automatically identifies affected taxpayers in disaster areas and applies filing and payment relief. If you are unsure whether you qualify, contact the IRS Disaster Hotline at (866) 562-5227. If you receive a notice from the IRS but believe you qualify for relief, you should call the number on the notice for assistance.

We’re Here to Help
We understand the challenges that come with navigating tax obligations during difficult times. If you have questions about your tax situation or need assistance claiming disaster-related tax relief, our experienced team is here to help. Please don’t hesitate to reach out to us at (408) 287-7911, or email Saralyn Winslow at swinslow@ppandco.com.

Stay safe and please know that our thoughts are with all those impacted by the wildfires.