The Internal Revenue Service (IRS) has announced significant tax relief for thousands of residents affected by the wildfires in California.
Wildfires, spread by powerful Santa Ana winds, are engulfing much of Los Angeles. At least six blazes are currently active in the region as of Saturday.
Why It Matters
The tax relief will help thousands of Los Angeles residents who have lost their homes and businesses after the wildfires to rebuild.
Officials have estimated that more than 12,000 structures have been destroyed in the fires in Los Angeles which have left 11 dead and many more injured, according to the Associated Press.
Ethan Swope/AP
What To Know
In a move aimed at alleviating some of the financial burdens faced by victims, the IRS is extending tax filing and payment deadlines from to October 15, 2025, for Los Angeles residents with homes or businesses in the city.
The relief applies to a wide range of tax deadlines, including individual income tax returns due on April 15, 2025, IRA and health savings account contributions, quarterly and estimated taxes due on January 15, 2025, or April 15, June 16, and September 15, 2025, and business filings due between March and July.
Additionally, penalties for missed payroll and excise tax deposits due between January 7 and January 22, 2025, will be waived if the deposits are made by January 22, 2025.
The IRS will automatically provide relief to taxpayers with an address in the affected areas, and those affected who don’t live in the disaster zone but whose records are there can contact the IRS for assistance. Additionally, taxpayers with uninsured losses due to the disaster can choose to claim them on either their 2024 or 2025 tax returns.
In April 2024, State Farm, one of the largest private insurers in the state, announced that it would cancel 72,000 policies in the state by the summer, including 30,000 home policies and 42,000 commercial apartment policies. Of these, 1,600 were insured homes in the affluent neighborhood of Pacific Palisades.
The Palisades has been one of the worst affected areas by the wildfires, which have burned over 21,000 acres and threatened more than 13,000 structures in the area, according to the California Department of Forestry and Fire Protection. So far, the Palisades fire has been 8 percent contained.
The total cost of the fires to Los Angeles is estimated to be between $135 billion and $150 billion, which amounts to nearly 4 percent of the annual GDP of the state of California, AccuWeather said in a Thursday press release.
What People Are Saying
AccuWeather Chief Meteorologist Jonathan Porter said in a press release on Thursday: “These fast-moving, wind-driven infernos have created one of the costliest wildfire disasters in modern U.S. history. Hurricane-force winds sent flames ripping through neighborhoods filled with multi-million-dollar homes. The devastation left behind is heartbreaking and the economic toll is staggering. To put this into perspective, the total damage and economic loss from this wildfire disaster could reach nearly 4 percent of the annual GDP of the state of California.”
What Happens Next
Fire crews are continuing to fight the wildfires. Meanwhile, the Santa Ana winds in Southern California are expected to pick up again over the weekend and potentially into next week, National Weather Service meteorologist Todd Hall told The New York Times, threatening more destruction in the state.
