California Wildfire Victims Get Major Tax Breaks: What You Need to Know

Southern California residents affected by the devastating January 2025 wildfires just got some much-needed relief. The IRS has extended several tax deadlines, providing breathing room for individuals and businesses to rebuild. Here's how this vital support impacts taxpayers in disaster-affected regions.

IRS Extends Deadlines for Filing and Payments

If you’re living in Los Angeles County or other areas impacted by these wildfires, you now have until October 15, 2025, to file federal tax returns and make payments. This extension covers:

• Individual Income Tax Returns: Normally due April 15, 2025.
• Quarterly Estimated Tax Payments: Due on January 15, April 15, June 16, and September 15, 2025.
• Payroll and Excise Tax Returns: Typically due January 31, April 30, and July 31, 2025.
• Business Returns: S corporation and partnership filings due March 17, 2025, and calendar-year corporation returns due April 15, 2025.

Penalty Waivers for Late Tax Payments

Good news! If payroll or excise tax deposits were delayed between January 7, 2025, and January 22, 2025, penalties will be waived as long as payments are completed by January 22, 2025.

Claim Disaster Losses on Your Taxes

Taxpayers suffering from uninsured or unreimbursed disaster-related losses can claim them on their 2025 return (filed next year) or amend their 2024 return. To claim these losses, write the FEMA declaration number 4856-DR on your return.

Special Relief for Retirement Accounts

If you need to tap into your retirement savings to cover wildfire-related expenses, the IRS has relaxed rules for qualified disaster distributions. Eligible taxpayers can avoid the usual 10% penalty and even spread the income over three years.

Automatic Relief: No Action Needed for Most

The IRS is automatically applying relief to taxpayers with addresses in designated disaster areas. If you’ve moved recently, contact the IRS if you receive a penalty notice.

Get Help with Your Taxes

Free resources are available to assist with tax preparation:

• VITA or TCE Programs: Free filing help for individuals earning less than $84,000 in 2024.
• IRS Free File: Free tax software for guided filing.
• AARP Tax-Aide Sites: Tax help for seniors.

Conclusion: Relief for Tough Times

The IRS is offering this relief as part of a coordinated effort to help Southern California residents recover. By extending deadlines, waiving penalties, and offering support for disaster-related losses, they aim to ease the burden on wildfire victims.

If you're affected, be sure to take full advantage of these benefits, and consult the IRS for updates or additional assistance.

FAQ's About IRS Tax Relief for Wildfire Victims