Tax and Financial Relief for California Wildfire Victims in Los Angeles and Ventura Counties
Recent wildfires have devastated communities across Los Angeles and Ventura Counties, leaving thousands of individuals and businesses struggling to recover. In response, both the federal and state governments have introduced critical tax and financial relief measures to help affected residents rebuild and regain stability.
At Horizon Trust, we understand the challenges wildfire victims face, and we are committed to providing up-to-date information on financial aid, tax benefits, and government relief programs. Below, we outline the IRS and California State relief programs designed to assist those impacted by the wildfires.
Federal Tax Relief: IRS Extensions and Benefits
The Internal Revenue Service (IRS) has granted tax relief to individuals and businesses in federally declared disaster areas, as designated by the Federal Emergency Management Agency (FEMA). This relief extends tax deadlines and provides financial benefits to eligible taxpayers affected by the wildfires.
Extended Deadlines for Tax Filings and Payments
To support those impacted, the IRS has extended various filing and payment deadlines to October 15, 2025. The following tax-related obligations are now postponed for affected individuals and businesses:
- Individual Income Tax Returns & Payments:
- Taxpayers who were originally required to file their 2024 individual tax returns by April 15, 2025, now have until October 15, 2025 to submit their returns and make payments.
- 2024 IRA & HSA Contributions:
- Those contributing to an Individual Retirement Account (IRA) or a Health Savings Account (HSA) for the 2024 tax year have until October 15, 2025, to make contributions that will count toward the previous year’s tax return.
- Business Tax Return Extensions:
- Partnerships, S corporations, C corporations, and fiduciary entities are granted extensions for their 2024 tax returns and related tax payments.
- Tax-Exempt Organization Filings:
- Nonprofit organizations and tax-exempt entities affected by the fires are eligible for filing extensions on their required returns.
- Estimated Tax Payments for 2024:
- Quarterly estimated income tax payments typically due on January 15, April 15, June 16, and September 15, 2025, are now postponed until October 15, 2025.
- Payroll & Excise Tax Filings:
- Quarterly payroll and excise tax returns, initially due on January 31, April 30, and July 31, 2025, have been extended to the October 15, 2025 deadline.
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Additional IRS Tax Relief Programs
Beyond deadline extensions, the IRS provides additional tax relief measures that can significantly benefit wildfire victims:
Claiming Disaster-Related Losses
Taxpayers in the affected disaster areas can claim uninsured or unreimbursed property losses resulting from the wildfires. These losses can be reported on either the 2024 tax return (filed in 2025) or the 2025 tax return (filed in 2026).
- The FEMA declaration number (4856-DR) must be included when reporting losses.
- The deadline to make this election is six months after the due date of the federal tax return for the disaster year, which is October 15, 2026, for individuals.
- For more information, see IRS Publication 547 (Casualties, Disasters, and Thefts).
Qualified Disaster Relief Payments
Victims who receive disaster-related payments from government agencies may exclude those funds from their taxable income if the money is used for:
- Necessary personal, family, or living expenses
- Funeral expenses
- Home repair costs or personal property replacement
These payments are not considered taxable income. To learn more, consult IRS Publication 525 (Taxable and Nontaxable Income).
Retirement Plan & 401(k) Hardship Withdrawals
Individuals impacted by the wildfires may qualify for special disaster distributions from their retirement plans:
- Early withdrawals may avoid the 10% penalty typically applied to distributions made before age 59½.
- Income from disaster-related withdrawals may be spread over three years to reduce tax burdens.
- Hardship withdrawals may also be available, depending on the retirement plan’s specific rules.
For further guidance, taxpayers should consult their plan administrator or review IRS guidelines on disaster relief retirement distributions.
State of California Tax Relief for Wildfire Victims
In addition to federal tax relief, the State of California has introduced emergency measures to help individuals and businesses recover financially. Governor Gavin Newsom declared a state of emergency for Los Angeles and Ventura Counties, which includes:
Unemployment Benefits Expansion
- The state waived the one-week waiting period for unemployment benefits for individuals who lost their jobs or income due to the wildfires.
- Affected workers can apply for Disaster Unemployment Assistance (DUA) through the California Employment Development Department (EDD).
California Tax Filing Extensions
The California Department of Tax and Fee Administration (CDTFA) has extended deadlines for affected taxpayers, offering:
- Sales and Use Tax Extensions
- Businesses and individuals now have an additional three months to file and pay sales and use taxes without penalties.
- Payroll Tax Extensions
- Employers can request a 60-day extension to file and deposit state payroll taxes.
To determine specific filing deadlines and eligibility, taxpayers should check the CDTFA website for updates.
Additional Financial Relief and Support Programs
Several federal and state agencies offer grants, low-interest loans, and financial assistance programs for those impacted by the wildfires.
FEMA Assistance
FEMA provides financial aid for:
- Temporary housing and rental assistance
- Home repairs and reconstruction
- Medical and dental expenses
- Personal property replacement
Wildfire victims can apply for FEMA aid online at disasterassistance.gov or by calling 1-800-621-FEMA (3362).
SBA Disaster Loans
The U.S. Small Business Administration (SBA) offers low-interest disaster loans to:
- Homeowners (up to $500,000 for repairs or replacement)
- Renters (up to $100,000 for lost personal property)
- Businesses (up to $2 million for property damage or economic injury)
Visit sba.gov/disaster for details and application instructions.
Final Thoughts: Taking Advantage of Available Relief
Recovering from a wildfire’s impact is challenging, but understanding and utilizing available tax relief and financial aid programs can ease the burden. The IRS and the State of California have taken significant steps to provide support, from tax deadline extensions to financial assistance and unemployment benefits.
At Horizon Trust, we are dedicated to helping wildfire victims navigate these relief programs and maximize their financial recovery. If you have any questions about how these tax provisions apply to you, contact us for personalized guidance.
For more information, visit the IRS Disaster Relief website, the California CDTFA website, or FEMA’s Disaster Assistance portal.