Following the wildfires and windstorms devastating Southern California, the California Department of Tax and Fee Administration (CDTFA), California Franchise Tax Board (FTB), California Employment Development Department (EDD), and the Internal Revenue Service (IRS) have issued tax relief to affected taxpayers. Taxpayers may be eligible for natural disaster tax relief if their home or business is located in a federally declared disaster area.1
Tax relief ranges from extensions of filing dates to waivers of penalties and interest and may apply only to specific tax types or taxpayers. Affected taxpayers should be aware of procedures to request relief from taxing authorities if they are not eligible for tax relief.
State Tax Relief2
Directly impacted taxpayers may be eligible for state tax relief, including additional time to file, penalty relief, and replacement copies of destroyed records free of charge.
California Department of Tax and Fee Administration3
Tax relief is available for certain taxes and fees administered by CDTFA.4 CDTFA has automatically extended filing deadlines by three months for Los Angeles County taxpayers. Automatic extensions on sales and use tax returns and payments are available to taxpayers owing less than $1 million in sales and use tax on their 2024 third quarter returns. Payments and returns will be due April 30, 2025. Businesses outside Los Angeles County may be eligible for disaster tax relief and extensions but must apply to CDTFA.
California Franchise Tax Board5
The FTB has announced that Los Angeles County businesses will be granted additional time to file returns on 2024 income and to make any tax payments due January 7, 2025, through October 15, 2025. Returns and payments for eligible taxpayers will be due October 15, 2025. Additionally, taxpayers affected by a presidentially declared disaster may claim a tax deduction for a disaster loss. This tax relief applies only to taxpayers with a principal place of business or principal residence in Los Angeles County.
California Employment Development Department6
Employers in Los Angeles and Ventura Counties directly impacted by the fires may request up to a 60-day extension to file state payroll reports or deposit payroll taxes. Penalties and interest do not apply to the extension. Taxpayers must apply for relief in writing within two months of the original payment or return date.
Federal Tax Relief7
Los Angeles County businesses may be eligible for federal tax relief, such as additional time to file and pay, casualty loss tax deduction, and copies of previously filed tax returns. Certain tax returns with an original or extended due date occurring on or after January 7, 2025, and before October 15, 2025, may qualify for an extended October 15, 2025, deadline. The October 15, 2025, extended deadline also applies to payments normally due during this period, such as quarterly payroll and excise tax returns (due January 31, 2025; April 30, 2025; and July 31, 2025). Eligible tax types include corporate income tax returns, partnership returns and S corporation returns, annual information returns of tax-exempt organizations, and employment and certain excise tax returns. Additionally, fees for copies of previously filed tax returns will be waived. Federal tax relief automatically applies to taxpayers with an IRS address of record in the disaster area. Affected taxpayers with businesses outside of Los Angeles County may request this relief from the IRS. Other relief, such as abatement of excise and payroll tax deposit penalties may also be available.
If you have questions about state or federal tax relief, or how to seek additional relief, please contact one of the Ryan experts listed below.
1 Consult https://www.fema.gov/disaster/declarations.
2 California Governor Newsom’s January 7, 2025, Proclamation of a State of Emergency includes Los Angeles and Ventura Counties. See: https://www.caloes.ca.gov/wp-content/uploads/Legal-Affairs/Documents/Proclamations/1.7.2025-SOE_Palisades-Fire_Formatted.pdf.
President Biden’s declaration of a major disaster for the State of California (DR-4856-CA), dated January 8, 2025, currently includes only Los Angeles County. See: https://www.fema.gov/disaster/4856/designated-areas.
3 Cal. Dep’t of Tax & Fee Admin., News Release No. 25-01, California Offers Tax Relief to Businesses Impacted by Los Angeles Wildfires (January 13, 2025).
4 Eligible taxes and fees include Alcoholic Beverage Tax; California Tire Fee; Cannabis Tax; Childhood Lead Poisoning Prevention Fee; Cigarette and Tobacco Products Tax; Covered Electronic Waste Recycling Fee; Diesel Fuel Tax; Emergency Telephone Users Surcharge; Energy Resources Surcharge; Fire Prevention Fee; Hazardous Waste Activity Fee; Hazardous Waste Disposal Fee; Hazardous Waste Environmental Fee; Hazardous Waste Facility Fee; Hazardous Waste Generator Fee; Integrated Waste Management Fee; Interstate User Diesel Fuel Tax; Jet Fuel Tax; Lead Acid Battery Fees; Lumber Products Assessment Fee; Marine Invasive Species Fee; Motor Vehicle Fuel Tax; Natural Gas Surcharge; Occupational Lead Poisoning Prevention Fee; Oil Spill Response, Prevention, and Administration Fee; Prepaid Mobile Telephony Services (MTS) Surcharge; Regional Railroad Accident Preparedness and Immediate Response Fee; Sales and Use Tax; Timber Yield Tax; Underground Storage Tank Maintenance Fee; Use Fuel Tax; Water Rights Fee.
5 Cal. Franchise Tax Bd., Tax News flash, Emergency tax relief for Los Angeles County fires (January 13, 2025); Cal. Franchise Tax Bd., Los Angeles County fires, 2024 taxable year disaster (January 14, 2025).
7 IRS News Release (IR-2025-10) California wildfire victims qualify for tax relief; various deadlines postponed to October 15 (January 10, 2025).
TECHNICAL INFORMATION CONTACTS:
Mark Nachbar
Principal
Ryan
331.998.7260
mark.nachbar@ryan.com
Christopher Potter
Director
Ryan
781.359.3800
christopher.potter@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.