Tax Relief

Franchise Tax Board gives tax breaks to California residents affected by forest fires

September 14, 2021 – Sacramento – The Franchise Tax Board (FTB) has announced a tax break for Californians affected by forest fires. Taxpayers and corporations in a disaster declared by the president Areas will be granted an extension until November 15, 2021 to file California tax returns for 2020 income and make any tax payments that would have been due between July 14, 2021 and November 15, 2021.

“We hope that the extra time to file and make certain payments will bring some relief to the Californians affected by these devastating forest fires.” said state controller and FTB chairwoman Betty T. Yee.

FTB automatically adheres to the Internal Revenue Service (IRS) postponement periods for President-proclaimed disasters.

On August 27, the IRS granted relief to individuals and businesses in four California counties: Lassen, Nevada, Placer, and Plumas. All counties that are later added to the disaster area will receive the same extension. This relief applies to various upcoming tax filing deadlines that came from July 14th, including the following:

  • Individual applicants whose prior tax return renewal should expire by October 15th. Since the tax payments related to these returns were originally due on May 17, 2021, payments related to these claims are not discounted.
  • Businesses with a due date between July 14th and November 15th.
  • Estimated quarterly tax payments due September 15th.

Taxpayers should write the name of the disaster (e.g. Dixie Fire) in blue or black ink at the top of their tax return to warn the FTB. When filing electronically, taxpayers should follow the software’s instructions to enter disaster information. If an affected taxpayer receives a late filing or a formal notice regarding the deferral period, the taxpayer should call the number on the notice to waive the fine.

Taxpayers who fall victim to forest fires can claim a deduction for disaster damage suffered in an area declared a state of emergency by the governor. A complete list of all disasters reported by the governor can be found in the table “List of disasters” on the disaster control website of the FTB. For more information and instructions, see FTB Publication 1034, 2020 Disaster Loss: How to Apply for a State Tax Withdrawal.

Taxpayers can claim their disaster damage in two ways. You can claim the catastrophe loss for the 2021 tax year when you file your declaration next spring, or you can claim the loss for 2020 income from this year’s declaration. An amended declaration can be submitted by those who have already submitted this year. The assertion of the catastrophe damage in the previous tax year has the advantage that the FTB can make an earlier reimbursement.

Disaster victims can also get free copies of their government statements to replace those that are lost or damaged. Taxpayers can fill out Form FTB 3516 and write the name of the disaster in blue or black ink at the top of the application.

FTB manages two of California’s major tax programs: income tax and corporate income tax. FTB also manages other non-tax programs and overdue debt collection functions, including debt collection for overdue vehicle registrations on behalf of the Department of Motor Vehicles and court orders. Every year, the tax programs of the FTB collect more than 70 percent of the general government funds. For more information about other California taxes and fees, visit: tax.ca.gov.
Source: FTB

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