Extended Deadlines and Key Benefits for Affected Taxpayers
The IRS has announced significant tax relief for individuals and businesses impacted by the California wildfires and straight-line winds that began on January 7, 2025. Affected taxpayers now have until October 15, 2025, to file their federal income and business tax returns and make payments.
This measure applies to residents and businesses in disaster areas identified by the Federal Emergency Management Agency (FEMA). Currently, Los Angeles County qualifies, with more areas potentially added later.
Who Qualifies for Relief?
If your IRS address of record is in the FEMA-declared disaster area, you automatically qualify for relief. Businesses and residents recently moving into the disaster zone must contact the IRS if they receive late filing or payment notices.
Additionally, relief extends to workers and organizations assisting with disaster recovery efforts, even if their tax records are outside the designated disaster areas. These individuals can call the IRS Disaster Hotline at (866) 562-5227 for assistance.
Tax preparers in affected wildfire zones can also leverage the Bulk Requests for Disaster Relief feature to assist clients living outside the disaster zone.
For the most up-to-date information on eligible locations, visit the IRS’ Tax Relief in Disaster Situations page.
What Does Tax Relief Include?
Tax relief means extra time to handle various tax obligations. The extended deadline applies to several key items:
- Individual Income Tax Returns and Payments
- 2024 federal income tax returns and payments, originally due April 15, 2025.
- Contributions to IRAs and Health Savings Accounts for 2024.
- Quarterly Estimated Tax Payments
- Payments due January 15, April 15, June 16, and September 15, 2025.
- Business Deadlines
- Partnership and S corporation returns due March 17, 2025.
- Corporate and fiduciary returns due April 15, 2025.
- Payroll and Excise Taxes
- Quarterly payroll and excise tax returns due January 31, April 30, and July 31, 2025.
- Penalties for failing to make payroll and excise deposits from January 7 through January 22, 2025, will be waived if deposits are made by January 22.
Taxpayers are encouraged to visit the IRS Disaster Assistance and Emergency Relief page for detailed postponement periods.
Claiming Disaster-Related Losses
Federally declared disaster victims can claim uninsured or unreimbursed losses on either their 2024 or 2025 tax returns. IRS Publication 547 provides detailed guidance on how to report these losses.
By choosing the year that provides the most significant tax benefit, taxpayers can reduce their financial burden during recovery.
Relief Payments and Retirement Options
Tax-free disaster relief payments can be used for personal, family, funeral expenses, and home repairs.
For retirement savings, impacted taxpayers can withdraw from retirement plans or IRAs without incurring the 10% early withdrawal penalty. Special rules also allow them to spread taxable income from these distributions over three years. Some plans may also offer additional hardship withdrawal options.
Check with your plan provider or refer to IRS guidance to ensure compliance with specific rules.
Conclusion
The IRS relief measures for California wildfire victims aim to reduce stress and provide much-needed support. From extended deadlines to disaster-related loss claims and retirement options, the relief package offers multiple ways to ease the financial impact.
If you or your business were affected, take full advantage of these benefits. Visit the IRS website or contact a tax professional for assistance navigating these changes.
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