Ref: IRS Tax Tip 2025-04 / Secure 2.0 Act

This IRS is reminding those in the Los Angeles County disaster are that they can:

1. Take up to $22,000 from their retirement without penalty (it will still be taxed)
2. Include that amount in their tax return over three years (up to $7,333 per year) OR
3. Repay the amount to the retirement account over three years.

Who qualifies:

1. Those displaced from their principal residence OR
2. Those who had damage to their principal residence OR
3. Those who lost income due to temporary or permanent layoff

Ref: Federal disaster declared Jan 8, 2025

On January 8, 2025, President Biden signed a major disaster declaration for the Los Angeles County wildfires.

If you experience a loss (after insurance settlement) you can claim a casualty loss on BOTH your federal and California returns. This is a complex calculation. Clients effected should contact us for more information. [Note that casualty losses NOT in a federal disaster area can be claimed only on the California return under current tax law].