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California Emergency Declaration for Sonoma, Napa, and Shasta Counties
Gov. Newsom has made a California emergency declaration for Sonoma, Napa, and Shasta counties due to the Glass and Zogg fires burning in those counties. This declaration provides additional resources and relief to individuals impacted by these fires.
Butte County added to list of CA counties receiving fire relief.
IRS added Butte County to the list of California counties receiving fire relief.
Following the recent disaster declaration for individual assistance issued by the Federal Emergency Management Agency, the IRS announced today that affected taxpayers in certain areas will receive tax relief.
Individuals and households who reside or have a business in Butte, Lake, Monterey, Napa, San Mateo, Santa Cruz, Solano, Sonoma and Yolo counties qualify for tax relief. but taxpayers in localities added later to the disaster area will automatically receive the same filing and payment relief.
The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after August 14, 2020, and before December 15, 2020, are postponed to December 15, 2020. This includes individual and business tax filers that had a valid extension to file their 2019 return due to run out on October 15, 2020. The IRS noted, however, that because tax payments related to these 2019 returns were due on July 15, 2020, those payments are not eligible for this relief.
The December 15 deadline applies to the third quarter estimated tax payment due on September 15. It also applies to the quarterly payroll and excise tax returns normally due on November 2. In addition, it applies to tax-exempt organizations, operating on a calendar-year basis, that had a valid extension due to run out on November 1.
California automatically follows IRS extended deadlines to file and pay taxes until the date indicated for the specific disaster. At the time of this writing, FTB is working on updating its Disaster Loss page to add Butte to the list of counties affected by the August 2020 wildfires (Disaster Code 115).
CA Taxpayers granted extension to file 2019 tax returns
The Franchise Tax Board (FTB) today announced special tax filing relief for Californians affected by wildfires. Taxpayers in governor-declared or presidentially declared disaster areas are granted an extension to file tax year 2019 California tax returns until December 15, 2020.
This relief applies to various upcoming tax filing deadlines for individuals and businesses in eight California counties: Lake, Monterey, Napa, San Mateo, Santa Cruz, Solano, Sonoma, and Yolo. Any counties added later to the disaster area will be granted the same extension of time to file.
The filing extensions include:
- Individual filers whose previous tax-filing extension was set to end October 15. Because tax payments related to these returns were originally due on July 15, any payments associated with these filings are not eligible for relief.
- Calendar-year tax-exempt organizations whose previous 2019 extensions were due to end November 15.
For a complete list of all disasters declared by the governor, see the List of Disasters chart on FTB’s disaster loss webpage.
Presidential Disaster Declaration allows for Casualty Loss deduction
As part of the Tax Cuts and Jobs Acts, casualty loss deductions were disallowed starting in 2018 unless the loss was incurred in a federally declared disaster area. Because of the Presidential Disaster Declaration made yesterday, victims of the August 2020 CA wildfires in Lake, Monterey, Napa, San Mateo, Santa Cruz, Solano, Sonoma and Yolo counties are eligible for the casualty loss deduction. (Taxpayers in localities added later to the disaster area will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.)
Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can claim a deduction for the loss on their tax return. They can choose to claim them on either the return for the year the loss occurred (in this instance, the 2020 return normally filed next year), or the return for the prior year (2019). Be sure to write the FEMA declaration number – 4558 − for California on any return claiming a loss.
Because the governor declared a state of emergency, the disaster loss is also deductible on the CA income tax return.
Reporting a casualty loss can be complex so we recommend you work with a qualified Enrolled Agent or other tax professional to do these calculations.
IRS provides tax relief for victims of August 2020 wildfires
Victims of the California wildfires that began Aug. 14 now have until Dec. 15, 2020 to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today.
The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual assistance. Currently this includes Lake, Monterey, Napa, San Mateo, Santa Cruz, Solano, Sonoma and Yolo counties in California, but taxpayers in localities added later to the disaster area will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.
The tax relief postpones various tax filing and payment deadlines that occurred starting on Aug.14, 2020. As a result, affected individuals and businesses will have until Dec. 15, 2020, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2019 return due to run out on Oct. 15, 2020, will now have until Dec. 15, 2020, to file. The IRS noted, however, that because tax payments related to these 2019 returns were due on July 15, 2020, those payments are not eligible for this relief.
The Dec. 15, 2020 deadline also applies to quarterly estimated income tax payments due on Sept. 15, 2020, and the quarterly payroll and excise tax returns normally due on Oct. 31, 2020. It also applies to tax-exempt organizations, operating on a calendar-year basis, that had a valid extension due to run out on Nov. 15, 2020. Businesses with extensions also have the additional time including, among others, calendar-year corporations whose 2019 extensions run out on Oct. 15, 2020.
In addition, penalties on payroll and excise tax deposits due after Aug. 14 and before Aug. 31, will be abated as long as the deposits are made by Aug. 31, 2020.
The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.
In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.
Presidential Major Disaster Declaration for August 2020 CA Wildfires
Governor Gavin Newsom today announced that the White House has approved California’s request for a Presidential Major Disaster Declaration to bolster the state’s emergency response to wildfires burning in Northern California and support impacted residents in Lake, Napa, San Mateo, Santa Cruz, Solano, Sonoma and Yolo counties.
A Presidential Major Disaster Declaration helps people in the impacted counties through eligibility for support including crisis counseling, housing and unemployment assistance and legal services. It also provides federal assistance to help state, tribal and local governments fund emergency response, recovery and protective measures.
Starting today you can apply for federal assistance at https://www.disasterassistance.gov
Payroll Tax Relief for August 2020 fire victims
The EDD announced that employers statewide directly affected by the fires and extreme weather may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit payroll taxes without penalty or interest. This extension may be granted under Section 1111.5 of the California Unemployment Insurance Code (CUIC).
A written request for extension must be received within 60 days from the original delinquent date of the payment or return. For more information about how to file this request, please see the EDD website HERE.
State of Emergency Declared due to Extreme Heat/Fires
On August 18th, Governor Gavin Newsom declared a State of Emergency for the State of California to help ensure the availability of vital resources to combat fires burning across the state, which have been exacerbated by the effects of the historic West Coast heat wave and sustained high winds.
Earlier this week, he secured Fire Management Assistance Grants (FMAGs) from the Federal Emergency Management Agency (FEMA) to bolster the state’s response to fires burning in Napa, Nevada and Monterey counties.
When the governor declares a state of emergency, it allows the state tax agencies to provide tax relief. Relief may include the extension of tax return due dates, relief of penalty and interest, or replacement copies of records lost due to disasters. We will publish articles as the agencies make official announcements over the next few days.
Property Tax Reassessments Available for Wildfire victims
With many homes, businesses, or property destroyed or damaged in the wildfires, property owners should contact their County Assessor’s Office to discuss possible property tax relief options. In many cases, the damaged property can be reappraised in its current condition, with some taxes refunded to the property owner. Once rebuilt, the property’s pre-damaged value will be restored.
To qualify for property tax relief, you must file a claim with your County Assessor’s Office within the time specified in your county ordinance, or 12 months from the date of damage or destruction, whichever is later. The loss estimate must be at least $10,000 of the current market value to qualify and the disaster must be the result of a Governor-proclaimed state of emergency.
Property owners may also apply for a property tax deferral without penalties or interest. If property owners file a timely claim, the next property tax installment payment is deferred without penalty or interest until the county assessor has reassessed the property and a corrected tax bill has been sent to the property owner. For further information on property tax disaster relief, please see our Disaster Relief web page with helpful information including Frequently Asked Questions (FAQs).
Is tax relief available for the Kincade, Tick, Getty, and Easy fires?
FEDERAL RELIEF (IRS)
The president must declare a federal disaster before the IRS can authorize federal tax relief. California Governor Newsom has not requested a Federal Disaster Declaration for the Kincade, Tick, Getty, or Easy Fires at this time.
CALIFORNIA RELIEF (FTB, EDD, CDTFA)
The Governor has declared a state of emergency in California due to high winds resulting in fires throughout the state. Thus, tax relief IS available from the California Tax agencies.
FTB
- Taxpayers may claim a disaster loss in one of two ways: In the tax year that the disaster occurred, when filing a 2019 tax return next year; or in the tax year before the disaster occurred by filing either an amended or original 2018 tax return. The FTB can more quickly issue a refund for eligible claimed losses in the prior tax year.
CDTFA
- Taxpayers may receive a three-month extension to file returns with the California Department of Tax and Fee Administration.
EDD
- Taxpayers may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit payroll taxes without penalty or interest. This extension may be granted under Section 1111.5 of the California Unemployment Insurance Code (CUIC). A written request for extension must be received within 60 days from the original delinquent date of the payment or return.