California Wildfire Tax Relief

January 22, 2025
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Grant Rice

The IRS and the state of California have announced tax relief for those affected by the recent wildfires in Los Angeles County. Following the recent declaration of a state emergency, all taxpayers in Los Angeles County have been granted a federal extension until October 15, 2025, for the following items:

  • Individual income tax returns
  • Business tax returns
  • Quarterly estimates for Q1, Q2, Q3, and Q4
  • Pass-Through Entity (PTE) tax payments
  • Not-for-profit tax returns

Those whose primary residence and/or principal business address are currently located in Los Angeles County are eligible for the tax relief even if they were not affected by the fires.

 

Sales and Use Tax

  • Returns and payments due on or before January 31, 2025, are automatically extended to April 30, 2025, for those who owed less than $1 million on their 2023 tax return
  • Businesses and individuals outside the disaster relief area could potentially be eligible for automatic extensions, penalty and interest relief, and flexible payment plans

 

Payroll Tax

  • Taxpayers in Los Angeles and Ventura Counties impacted by the wildfires can request a 60-day extension from the California Employment Development Department (EDD) to file state payroll reports or pay taxes without penalties or interest
  • Request must be submitted within 2 months from the original due date

 

Property Tax

  • Los Angeles County property owners with fire-damaged property may qualify for property tax relief under the misfortune and calamity program.
  • To be eligible for the program:
    • Must file Form ADS-820 with the Los Angeles County Assessor’s Office within 12 months of the damage
    • Must have suffered a loss exceeding $10,000 in current market value
  • Additionally, under California Proposition 19, property owners whose properties were significantly damaged in a governor-declared disaster can transfer their tax base to a comparable property within California

 

Additional Notes

  • Taxpayers should review recent qualifications and consult their tax advisors for next steps
  • Disaster losses may be claimed in either the tax year the disaster occurred on their 2024 tax return or their prior-year 2023 tax return

Even if the taxpayer does not qualify for direct relief, they might be able to benefit in other ways using various potential tax saving opportunities.

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