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Tax relief for wildfire victims

The California Franchise Tax Board (FTB) has issued rules for additional tax filing relief for Californians affected by the September wildfires. Taxpayers in certain governor-declared disaster areas, including Sonoma County, are granted an extension to Jan. 15, 2021, to file California tax returns on 2019 income and make any tax payments that would have been due between Sept. 4 and Jan. 15. FTB’s extension applies to individuals and businesses in the same 10 counties the IRS granted relief to on Oct. 19 and Oct. 23: Fresno, Los Angeles, Madera, Mendocino, Napa, San Bernardino, San Diego, Shasta, Siskiyou, and Sonoma. The tax relief postpones various tax filing and payment deadlines that occurred starting on Sept. 4, including the following:

• Individual filers whose previous tax-filing extension was set to end Oct. 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.

• Business entities with a due date between September and January 15.

• Quarterly tax payments due September 15. Taxpayers should write the name of the disaster (for example, Glass Fire) in blue or black ink at the top of their tax return to alert FTB. If taxpayers are filing electronically, they should follow the software instructions to enter disaster information. If an affected taxpayer receives a late filing or late payment penalty notice related to the extended postponement period, the taxpayer should call the number on the notice to have the penalty abated. Taxpayers who are victims of wildfires may claim a deduction for a disaster loss sustained in an area proclaimed by the governor to be in a state of emergency. Additional information and instructions are available in FTB Publication 1034, 2019 Disaster Loss: How to Claim a State Tax Deduction. Taxpayers may claim their disaster loss in one of two ways: they may claim the disaster loss for the 2020 tax year when they file their return next spring, or they may claim the loss against 2019 income on this year’s return. An amended return may be filed by those who already have filed this year. The advantage of claiming the disaster loss in the prior tax year is that the FTB can issue a refund sooner.

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