Navigating Tax Relief for Los Angeles County Wildfire Victims

Following a Federal Emergency Management Agency (FEMA) disaster declaration, the IRS announced on January 10, 2025, that taxpayers in Los Angeles County will receive an extension to file federal tax returns and make payments. California Governor Gavin Newsom subsequently announced similar relief measures for state taxes on January 11, 2025. The disaster area encompasses all of Los Angeles County, providing broad coverage for residents and businesses impacted by the wildfires.

Key Details of the Tax Relief

Extended Deadlines

Affected taxpayers now have until October 15, 2025, to file various federal and state tax returns and make payments that were originally due between January 7, 2025, and October 15, 2025. This includes:

• Individual Income Tax Returns: Originally due on April 15, 2025.
• Estimated Tax Payments: Due dates for quarterly estimated payments on January 15, April 15, June 15, and September 15 of 2025 are also extended.
• Business Tax Returns: This includes returns for partnerships, S corporations, C corporations, and tax-exempt organizations.
• Payroll and Excise Taxes: Penalties on payroll and excise tax deposits due between January 7 and January 22, 2025, will be abated if paid by January 22.

Understanding the Tax Relief Measures

In response to the devastating wildfires that began in January 2025, the IRS has extended tax relief to affected individuals and businesses in Los Angeles County. This relief includes postponing various tax filing and payment deadlines that were originally scheduled between January 7, 2025, and October 15, 2025. As a result, affected taxpayers now have until October 15, 2025, to file returns and pay any taxes due during this period.

Who Qualifies for This Relief?

The relief applies to individuals and businesses whose principal residence or principal place of business is located in Los Angeles County. Additionally, taxpayers who operate outside of Los Angeles but whose records are maintained within the county may also qualify for relief.

Defining Principal Residence and Principal Place of Business

Principal Residence

A principal residence is the main home where you live most of the time. It can be a house, condominium, cooperative apartment, mobile home, house trailer, or houseboat that provides basic living accommodations. Factors that determine your principal residence include:

• Time Spent: The amount of time you live in the home during the year.
• Mailing Address: The address used for bills, correspondence, and official documents.
• Personal Belongings: Location of your furniture, family photographs, and other personal items.
• Family Location: Where your immediate family resides.

For tax purposes, your principal residence is significant when considering exclusions of gain from the sale of the home and other tax benefits.

Principal Place of Business

Your principal place of business is the main location where you conduct your trade or business. Factors to consider include:

• Time Spent: The amount of time you spend at each location.
• Business Activities: The importance of the activities performed at each location.
• Income Generated: The income earned at each location.

This designation is important for deductions related to business expenses and determining eligibility for certain tax relief measures.

What Does the Extended Deadline Cover?

The extended deadline encompasses a variety of tax-related actions, including:

• Individual Income Tax Returns: Originally due on April 15, 2025.
• Business Tax Returns: Including partnerships and S corporations with original or extended due dates within the relief period.
• Estimated Tax Payments: Quarterly payments that were due during the relief period.
• Payroll and Excise Tax Returns: Normally due during the relief period.

While the filing and payment deadlines are extended, taxpayers are encouraged to file and pay as soon as they are able. Filing electronically and opting for direct deposit for refunds can expedite the process.

Property Tax Relief

Property owners in Los Angeles County who suffered damage from the wildfires may qualify for immediate property tax relief. This includes potential temporary tax reductions and deferrals for properties with damage exceeding $10,000. Claims must be filed with the Los Angeles County Assessor within specified timeframes

State-Level Support

California’s Franchise Tax Board (FTB) has aligned its deadlines with those of the IRS. The state has also announced that taxpayers will receive automatic extensions for sales and use tax filings due before January 31, 2025. These extensions will allow affected businesses to file their returns until April 30, 2025.

Governor Newsom emphasized the state’s commitment to supporting those impacted by the wildfires through various disaster relief resources. The FTB is prepared to assist taxpayers in navigating their recovery options.

Steps to Take Advantage of the Tax Relief

If you qualify for the extended deadlines, consider the following steps to ensure you make the most of the available relief:

1. Assess Your Situation: Determine which tax returns and payments are affected by the new deadlines.
2. Gather Necessary Documentation: Collect necessary financial records for accurate filing.
3. Choose Appropriate Tax Preparation Software: Utilize tax preparation software to assist in filing your returns. Many software providers offer free versions for simple tax situations, and some participate in the IRS Free File program, which is available to taxpayers with an Adjusted Gross Income (AGI) of $84,000 or less. Additionally, services like Easy Tax Returns offer user-friendly platforms designed to simplify the filing process, ensuring accuracy and compliance with tax regulations.
4. File Electronically: E-filing is the fastest and most secure way to submit your tax returns. It also facilitates quicker processing of refunds.
5. Stay Informed: Regularly check the IRS website for any updates or additional relief measures that may be announced.

Do I Need to Apply for the Tax Filing and Payment Extension?

No, the IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. However, if you are affected by the disaster but live outside the covered disaster area, you should call the IRS disaster hotline at 866-562-5227 to request this tax relief.

Harnessing Strength and Looking Ahead

The road to recovery from the wildfires is undoubtedly challenging, but with the right information and resources, Los Angeles County residents and business owners can navigate these turbulent times with confidence. By taking advantage of the tax relief measures, you can focus on rebuilding and restoring your community. Remember, you are not alone in this journey—support is available, and brighter days are ahead.