IRS, State of California Offer Tax Relief for Wildfire-Impacted Taxpayers in Los Angeles County

In response to a Federal Emergency Management Agency (FEMA) declaration on the Los Angeles wildfires, the IRS on Jan. 10, 2025, issued a news release, IR-2025-10, which postpones certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. Various relief measures relating to California taxes were announced the following day by Gov. Gavin Newsom. The disaster area encompasses all of Los Angeles County, including areas outside the fire zone.

Federal Relief

• Affected individuals and businesses will have until Oct. 15, 2025, to file returns and pay any taxes that were originally due during the period from Jan. 7 to Oct. 15, 2025.
• Affected individuals and business are broadly defined. The IRS automatically gives relief to taxpayers located in the covered disaster area, but others affected by the disaster (such as persons whose records are located in Los Angeles County or relief workers wherever they reside) may also be eligible but must contact the IRS to request relief.
• The relief applies to many kinds of tax forms and payments, including estimated tax payments due as early as Jan. 15, as well as on April 15, June 16 and Sept. 15, 2025, along with tax returns due on April 15 and many others. Additional details are in the IRS news release.

California Relief

• Taxpayers in Los Angeles County are granted a postponement to Oct. 15, 2025, to file California tax returns on 2024 income and make any tax payments that would have been due from Jan. 7 through Oct. 15, 2025. This aligns with the federal extension recently granted to California's wildfire victims.
• The governor's announcement specifically mentions postponements for:
  • individuals whose tax returns and payments are normally due on April 15, 2025
  • quarterly estimated tax payments normally due on Jan. 15, April 15, June 15 and Sept. 15, 2025
  • business entities whose corporate or passthrough entity (PTE) tax returns are normally due on March 15 and April 15, 2025
  • PTE elective tax payments normally due on March 15 and June 15, 2025
  • tax-exempt organization returns normally due on May 15, 2025

Other States

• No other states have announced relief for taxpayers located in Los Angeles County with respect to taxes due and tax and information returns due during the period for which federal or California postponements have been granted.
• Check with local tax advisors if you need information or assistance with respect to such payments and filings.

Other Tax Consequences

Losses resulting from disasters may trigger a variety of tax consequences. These can include:

• the treatment of losses and election to apply certain disaster-related losses incurred in 2025 against 2024 income
• the effect of insurance recoveries
• the treatment of qualified disaster relief payments
• the impact of Internal Revenue Code Section 1033 (involuntary conversions), theft losses (Section 165) in relation to looting and bad debt losses, and cancellation of indebtedness income (Sections 165, 166 and 108)
• gift and estate planning issues resulting from diminished value of assets

Some of these issues will play out differently for corporate and noncorporate clients and also for U.S. and foreign clients. Holland & Knight will provide additional details in a future alert.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.