In the aftermath of the California wildfires that began January 7, 2025, the IRS announced tax relief for individuals and businesses in parts of California affected by the wildfires and straight-line winds.
The Federal Emergency Management Agency (FEMA) issued a disaster declaration for Los Angeles County, and individuals and households that reside or have a business in the county qualify for disaster tax relief. Individuals and businesses will now have until October 15, 2025 to file various federal, individual, and business tax returns along with payments.
Extra Time to File and Pay Taxes
If the taxpayer is in a FEMA-designated disaster area, the IRS automatically identifies those located in the covered disaster area and appliesyt filing and payment relief. Taxpayers who reside or have a business located outside the covered disaster area should call the IRS disaster hotline at 866.562.5227 to request this tax relief. If a taxpayer receives a late filing or penalty notice from the IRS that falls within the postponement period should call the telephone number on the notice to have the IRS abate the penalty.
Individuals and businesses will have until October 15, 2025 to file returns an pay any taxes that were originally due during this period. This deadline also applies to the 2024 estimated tax payments due in 2025 on January 15, April 15, June 16, and September 15.
The extended deadline also applies to the following business returns and filings:
- Quarterly payroll and excise tax returns normally due on January 31, April 30, and July 31.
- Calendar-year partnership and S corporation returns normally due on March 17, 2025.
- Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2025.
- Calendar-year tax-exempt organization returns normally due on May 15, 2025.
Transcripts and Copies Fee Relief
The IRS is waiving the usual fees and requests for copies of previously filed tax returns for affected taxpayers. Taxpayers will need to put the assigned FEMA declaration number (4856-DR), in bold letters at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, and submit to the IRS.
Casualty Loss Deductions
If taxpayers have suffered damage or lost property in a federally-declared disaster area, they may be eligible for a casualty loss deduction. This deduction covers damages not covered by insurance or other reimbursements and could result in a larger refund. If the taxpayer has a deduction that exceeds their income, they may be eligible for a net operating loss (NOL) which can be carried forward to future tax years. For more details, check Publication 547.
Disaster Relief Payments
Most disaster relief payments, such as amounts received from government agencies to cover necessary personal, family, living, or funeral expenses, as well as home repairs or replacing personal property, are not taxable and thus aren't included in gross income. See Publication 525 for more details.
Retirement Plan Relief
Taxpayers with a retirement plan or IRA may be able to take a special disaster distribution. These distributions are not subject to the usual 10% early withdrawal penalty, and may be able to spread the income over three years. Taxpayers may qualify for a hardship withdrawal, depending on the specific plan.
Additional Information:
CA FTB: Los Angeles County Fires 2024 Taxable Year Disaster
IRS: Announcement for Tax Relief for California Wildfire
IRS: Tax Relief In Disaster Situations
IRS: Disaster Assistance & Emergency Relief for Individuals & Businesses
How Do I Find a FEMA Disaster Designation Number and/or Date?
Federal Emergency Management Agency (FEMA)
FEMA: California Wildfires and Straight-line Winds (DR-4856-CA)