Abacus

IRS Tax Relief for Southern California Wildfire Victims

In light of the ongoing wildfires in Los Angeles, we want to take a moment to express our deep concern for all those affected by this devastating disaster. Our thoughts are with everyone impacted by the fires.

We wanted to share that the IRS has announced important tax relief measures in response to the recent presidential declaration related to the devastating wildfires in Southern California.

Overview of Relief Measures

The IRS has announced that residents and businesses in the affected areas (currently Los Angeles County) will be granted additional tax relief to help alleviate the financial impact of the wildfires. The current list of eligible localities is available on the tax relief in disaster situations page on IRS.gov.

This relief includes:

Extended Deadlines: Tax filing and payment deadlines for individuals and businesses affected by the wildfires have been automatically extended. This includes various tax returns and payments due on or after the declaration date. This means, for example, that the Oct. 15, 2025, deadline will now apply to:

  • Individual income tax returns and payments normally due on April 15, 2025.
  • 2024 contributions to IRAs and health savings accounts for eligible taxpayers.
  • 2024 quarterly estimated income tax payments normally due on Jan. 15, 2025, and estimated tax payments normally due on April 15, June 16 and Sept. 15, 2025.
  • Quarterly payroll and excise tax returns normally due on Jan. 31, April 30 and July 31, 2025.
  • 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.

Penalty Waivers: For individuals and businesses unable to file or pay their taxes on time due to the disaster, the IRS will waive penalties. This relief applies to various forms and schedules.

Deductible Casualty Losses: Taxpayers may be able to claim losses incurred due to the wildfires as a deduction on their federal tax returns. A key aspect of this relief is the ability to carry back casualty losses to the prior tax year.

Carrying Back Casualty Losses: If you experienced casualty losses due to the wildfires, you may elect to apply these losses to the prior tax year, potentially resulting in a tax refund. This is particularly beneficial if your taxable income in the prior year was higher, as it can maximize your refund.

Access to Additional Resources: The IRS may provide additional relief and/or resources to assist taxpayers in understanding their eligibility for various forms of relief, ensuring that those affected can access the support they need.

What You Should Do

  • Assess Your Situation: If you or your business has been affected by the wildfires, evaluate your eligibility for the aforementioned relief measures, particularly the option to carry back casualty losses.
  • Consult Your Tax Advisor: We recommend discussing your specific circumstances with your tax advisor to maximize your potential benefits and ensure compliance with new deadlines.
  • Stay Informed: Keep an eye on IRS updates and announcements, as the Service may continue to provide guidance on navigating these changes.

For additional details, you can view the official IRS bulletin linked here regarding this tax relief.

Please feel free to reach out if you have any questions or need assistance in understanding how these measures may impact your tax obligations. Our team is here to support you through this challenging time.