The Internal Revenue Service (IRS) has announced significant tax relief for individuals and businesses in southern California affected by wildfires and straight-line winds that began on January 7, 2025. This relief extends various federal tax filing and payment deadlines, offering much-needed support to those impacted by the disaster. Here’s everything you need to know about the tax extensions and available assistance.

Who Qualifies for Tax Relief?

The relief applies to any area designated by the Federal Emergency Management Agency (FEMA) as a disaster zone. Currently, individuals and businesses located in Los Angeles County are eligible. However, additional counties may be added to the disaster area as assessments continue.

To stay updated, visit the Tax Relief in Disaster Situations page on IRS.gov.

Extended Deadlines

Affected taxpayers now have until October 15, 2025, to file their federal tax returns and make payments originally due between January 7, 2025, and October 15, 2025. The extended deadlines cover:

  1. Individual Income Tax Returns and Payments:
    • Normally due on April 15, 2025.
    • Includes contributions to IRAs and Health Savings Accounts for the 2024 tax year.
  2. Estimated Tax Payments:
    • Quarterly payments due on January 15, April 15, June 16, and September 15, 2025.
  3. Business and Partnership Tax Returns:
    • Calendar-year partnership and S corporation returns due on March 17, 2025.
    • Calendar-year corporate and fiduciary returns due on April 15, 2025.
  4. Payroll and Excise Tax Returns:
    • Quarterly payroll and excise tax returns normally due on January 31, April 30, and July 31, 2025.
    • Penalties for payroll and excise tax deposits due from January 7 to January 22, 2025, will be abated if deposits are made by January 22, 2025.
  5. Tax-Exempt Organization Returns:
    • Calendar-year returns due on May 15, 2025.

For more details, refer to the Disaster Assistance and Emergency Relief page.

Claiming Disaster-Related Losses

Taxpayers in federally declared disaster areas can claim uninsured or unreimbursed disaster-related losses on either:

  • Their 2025 tax return (filed in 2026), or
  • Their 2024 tax return.

To claim these losses, write the FEMA declaration number 4856-DR on the return. Taxpayers have an extended deadline of October 15, 2026, to make this election.

For more information, review Publication 547: Casualties, Disasters, and Thefts.

Exclusions from Gross Income

Qualified disaster relief payments are generally excluded from gross income. This means taxpayers can exclude amounts received for:

  • Necessary personal, family, or living expenses.
  • Funeral costs.
  • Repairs or rehabilitation of their home.
  • Replacement of damaged contents.

Learn more by reading Publication 525: Taxable and Nontaxable Income.

Retirement Plan Relief

Additional relief is available for individuals participating in retirement plans or IRAs. Taxpayers may:

  • Take a special disaster distribution without the 10% early withdrawal penalty, with income spread over three years.
  • Opt for a hardship withdrawal if eligible.

Refer to your plan’s rules and guidance for further details.

Automatic Relief and Special Circumstances

The IRS automatically provides relief to taxpayers with an IRS address of record in the disaster area. No action is needed to receive this extension.

However, those who:

  • Moved to the disaster area after filing their return, or
  • Live outside the area but have records in the affected zone,

should contact the IRS at 866-562-5227 if they receive a penalty notice or need assistance. Relief is also available for workers assisting in relief efforts with recognized organizations.

Claiming Disaster Losses: Key Steps

To maximize your tax benefits:

  1. File Form 4684: “Casualties and Thefts” to report losses.
  2. Include FEMA declaration number 4856-DR on your return.
  3. Consult a tax professional for complex situations.

Free Tax Preparation Resources

The IRS offers several free tax preparation tools and services for eligible taxpayers:

  1. Volunteer Income Tax Assistance (VITA):
    • Free help for individuals with AGIs under $84,000 in 2024.
    • Find a site using the VITA Locator Tool or call 800-906-9887.
  2. AARP Tax-Aide:
  3. IRS Free File:
    • Guided tax software for those with AGIs under $84,000.
    • Access via the IRS Free File page.
  4. MilTax for Military Families:
    • Free filing for federal and up to three state returns.
    • Details available on the Military OneSource website.

Stay Updated on Relief Efforts

This tax relief is part of a coordinated federal response to the damage caused by California wildfires. Additional assistance may be announced as FEMA assessments continue. For the latest information, visit DisasterAssistance.gov.

By extending deadlines and offering support, the IRS aims to alleviate the financial burden on wildfire victims. Taxpayers are encouraged to utilize available resources and consult professionals to ensure they take full advantage of the relief measures.

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