The Internal Revenue Service announced broad tax relief for individuals and businesses affected by the devastating wildfires that began on January 7, 2025, in Los Angeles County. This extension allows more time for the filing of taxpayers’ returns and the making of any payments needed without incurring penalties.
Background of the wildfires
The wildfires in Southern California have wrought havoc, destroying over 10,000 structures and displacing countless residents. In response to this disaster, the federal government and the state of California have marshaled resources to bring succor to those affected.
Upon the declaration of a state of emergency by Governor Gavin Newsom, President Biden issued a Major Disaster Declaration for the state. The declaration would allow affected taxpayers to obtain various forms of financial relief, including extended tax deadlines.
New tax deadlines
The IRS announced that the new deadline, October 15, 2025, is for filing tax returns and paying amounts due for individuals and businesses in the affected area. This relief primarily applies to most tax obligations otherwise due between January 7 and October 15, 2025. Here are key details:
- Individual Income Tax Returns: The taxpayers who would have the obligation to file by April 15, 2025, now have their deadline extended until October 15, 2025.
- Estimated Tax Payments: This includes the estimated payments that are due on January 15, April 15, June 16, and September 15 for the year 2025.
- Business Tax Returns: This extended deadline shall apply to a number of business-related filings including quarterly payroll and excise tax returns, as well as corporate and partnership returns.
- Payroll Tax Penalties: No penalty will be assessed for payroll and excise tax deposits due between January 7 and January 22, 2025, if the payment is made by January 22, 2025.
This expanded relief is designed to take some of the burden off of taxpayers trying to cope with the impact of the wildfires and give them the opportunity to concentrate on recovery rather than immediate financial obligations.
California State tax relief
Apart from the federal actions, California’s Franchise Tax Board has also issued a notice of extension for state tax returns. To put it into effect, Los Angeles County taxpayers will be allowed up to October 15, 2025, to file state income tax returns for the year 2024 and make related payments that were otherwise due between the periods. The FTB deadline extension follows the footsteps of the federal law but with some restrictions on the following:
- Taxpayers who have payments due on April 15.
- Quarterly estimated tax payments normally due in January, April, June and September.
Corporate and pass-through entity tax returns normally due in March and April.
The filing deadlines for sales and use tax have also been postponed from January 31 to April 30 for some taxpayers in Los Angeles County.
Eligibility for relief
Taxpayers with a record in Los Angeles County, who live or do business there, will automatically receive the relief, but the ones who do not, yet whose record is housed within the said county may apply and hence ought to contact either IRS or FTB for more information.
In addition, the disaster loss deductions may also be claimed by individuals who suffered losses from the wildfires. It will speed up any possible refunds when claimed on their tax returns.
Next steps for affected taxpayers
Affected taxpayers by the wildfires should actively take advantage of these extensions by first taking the following steps:
- Check your eligibility: First, confirm your eligibility by establishing your residence or business within Los Angeles County.
- Call for tax professionals: For personal counsel or help in submitting disaster-loss-related claims or any other tax matter.
- Stay informed: Go to both the IRS and California’s FTB for any subsequent changes or additional relief as recovery efforts continue.
Such recent extensions announced by both federal and state authorities are a commitment to the relief of people affected by natural disasters. By allowing extra time for filing taxes and making payments, affected individuals and businesses will find it easier to cope with their recovery under very challenging conditions.
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