Tax Return and Payment Extensions for Victims of California Wildfires

October 20, 2020 | By: Kari Brummond, EA

Due to the devastating nature of the wildfires currently raging in California, the Internal Revenue Service (IRS) has extended most tax deadlines for people and businesses in affected areas to January 15, 2021. 

Who Qualifies for Tax Extensions in California?

IRS extends relief to California wildfire victimsTo qualify for the tax deadline extension, you must live or run your business in an area designated as qualified for assistance by the Federal Emergency Management Agency (FEMA). As of October 20, 2020, this includes the following counties:

  • Fresno 
  • Los Angeles 
  • Madera 
  • Mendocino 
  • San Bernardino 
  • San Diego 
  • Siskiyou

If your area is added to the list later, you receive the same extension. You can find an up-to-date list on the IRS website. 

You can also qualify for the deadline extension if you keep your records in one of these areas, even if you don't live or have a business there. People who are involved in disaster relief efforts may also qualify. But in these situations, the relief typically does not come automatically. Instead, if you fall into one of these special categories, you must let the IRS know that you qualify for the extension. 

Which Tax Deadlines Have Been Extended?

The IRS has extended deadlines for tax returns and payments due on or after September 4, 2020, and before January 15, 2021. This includes tax returns for the following entities:

  • Individuals 
  • Corporations
  • Partnerships
  • S-corps
  • Tax-exempt organizations
  • Estates
  • Trusts

The extension also applies to estate, gift, or generation-skipping transfer tax returns as well as quarterly payroll and excise tax returns. Additionally, if you have an estimated income tax payment due on September 15, 2020, you don't have to pay until January. 

Individuals and businesses who planned to file their 2019 income tax return by October 15, 2020, also have until the January 15, 2021 deadline. Normally, the deadline to file these returns is April 15, but due to the coronavirus, the IRS extended this deadline to October 15. If you're in one of the areas affected by the California wildfires, you now get even more time. 

Similarly, tax-exempt organizations already had the deadline for their returns extended to November 16, 2020, due to the coronavirus, but that deadline has been moved to January as well. 

Can You Claim Casualty Losses?

If you are in one of these areas or another federally declared disaster area, you can claim disaster-related casualty losses on your federal income tax return for the year in which the disaster occurred or the prior year. Individuals can also deduct property losses that were not covered by insurance or other reimbursements. 

In other words, if you suffered casualty losses in 2020 due to these fires, you can claim those losses on your 2020 return or 2019 return. 

What If You Don't Live in One of These Areas?

This relief is for people in businesses in areas affected by the September fires in this state, and if you are in another part of California, you may qualify for relief from another program. 

In particular, people from Butte, Lake, Lassen, Monterey, Napa, San Mateo, Santa Clara, Santa Cruz, Solano, Sonoma, Trinity, Tulare, and Yolo counties get to move all due dates on or after August 14, 2020, to December 15, 2020. 

What Should You Do If You Get a Notice From the IRS?

If you get a notice from the IRS saying that your payment or return is late and you believe that you should qualify for the extended deadline, contact the IRS directly or reach out for professional tax help. People who qualify for this relief do not have to pay any late filing fees, late payment fees, penalties, or interest.