Source: Bipartisan Budget Act of 2018 (BBA)

BBA defines a California wildfire disaster area as those declared as Presidential disaster areas under the Stafford Act between the dates Jan 1, 2017 and Jan 18, 2018.

Casualty loss: The 10% of adjusted gross income limitation is eliminated allowing more of the net deduction (after insurance reimbursement) as a tax deduction.  Also, for taxpayers who don’t itemize, the casualty loss can be added to their standard deduction.

IRA penalty waived: Subject to dollar limitations, the ten percent early IRA penalty is waived for amounts used to replace damaged property in the California wildfire disaster zones. (Traditional IRA withdrawals are still subject to income tax).

For declared California wildfire disaster zones, see the FEMA web page.