The Internal Revenue Service (IRS) recently announced that California wildfire victims are now eligible for tax relief, including deadline extensions. The full details of this announcement are available here.
This is good news for all Californians who have been significantly affected by the wildfires that began on January 7, 2025. The IRS has extended various deadlines for these victims until October 15, 2025.
This extension allows taxpayers directly impacted by the wildfires a grace period to handle their affairs without the added pressure of imminent tax deadlines. For HR Directors and Benefit Managers, this new development could translate into a welcome relief for their employees’ and companies’ tax responsibilities.
The extensions include several provisions related to employee benefits:
- Health Savings Account (HSA) Contributions: Eligible taxpayers now have until October 15, 2025, to contribute to their HSAs for the 2024 tax year.
- Individual Retirement Account (IRA) Contributions: Similarly, the deadline for 2024 IRA contributions has been extended to October 15, 2025.
- Retirement Account Withdrawals for Disaster Relief: Under the SECURE 2.0 Act of 2022, individuals affected by federally declared disasters, such as these wildfires, can withdraw up to $22,000 from retirement accounts like 401(k)s and IRAs without incurring the typical 10% early withdrawal penalty. These distributions can be repaid within three years to avoid taxes.
This also means that individuals and businesses with deadlines on or after July 15 and on or before October 15 now have additional time to meet their obligations.
For example, the Oct. 15, 2025, deadline will now apply to:
- Individual income tax returns and payments normally due on April 15, 2025, quarterly estimated income tax payments normally due on Jan. 15, 2025, and estimated tax payments normally due on April 15, June 16 and Sept. 15, 2025.
- Quarterly payroll and excise tax returns normally due on Jan. 31, April 30, and July 31, 2025.
- Calendar-year partnership and S corporation returns normally due on March 17, 2025.
- Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2025.
- Calendar-year tax-exempt organization returns normally due on May 15, 2025.
In addition, penalties on payroll and excise tax deposits due on or after July 15 and before July 30 will be abated as long as the deposits were made by July 30, 2020.
It’s important to remember that not all areas in California qualify for this relief. The current list of eligible localities can be found on the IRS’s disaster relief page.
Helpful Resources
- IRS: Tax Relief for California Wildfire Victims – For the full announcement and all related information.
- Disaster Relief Page – For the complete list of eligible localities.
- IRS: Disaster Assistance and Emergency Relief – For further information on the IRS’s role in disaster situations.
By staying informed and acting promptly, we can help ease the tax-related stress for those affected by the California wildfires.
