Disaster loss deduction

You may deduct any President or Governor declared loss caused by a disaster you suffered in California. California law generally follows federal law regarding the treatment of losses incurred as a result of a casualty or a disaster.

Types of losses that may qualify

Casualty loss

You were not repaid for the damage to your property that was lost or damaged due to a sudden, unexpected, or unusual:

• Earthquake
• Fire
• Flood
• Similar event

You may deduct a disaster loss suffered in California beginning on or after January 1, 2014, and before January 1, 2029. For 2014 and prior, see How to Claim a State Tax Deduction for Your Disaster Loss (FTB Pub 1034).

How to claim the disaster loss deduction on your tax return

The disaster loss must be claimed in the taxable year the disaster occurred or in the taxable year immediately before the disaster occurred. If you meet the qualifications to claim a disaster loss, the same disaster rules and extended deadlines apply to you.

1. File your tax return
   • e-file
     1. Use the disaster code from the List of disasters for California
   • Paper
     1. Print the following information in blue or black ink across the top of your return:
        • Disaster
        • Name of disaster from the List of disasters
        • The year the loss occurred
        • Example: Disaster: Camp Fire 2018
2. Include or attach:
   • A clearly written statement to your loss documentation that indicates:
     1. The date of the disaster
     2. The location of the disaster (city, county, and state)
     3. Your decision to deduct the loss in the taxable year before the year the disaster occurred (optional)
   • Copies of the following federal forms:
     1. A completed federal Casualties and Thefts (use California amounts) (Form 4684)
     2. A copy of your federal income tax return
     3. Any supporting federal schedules that verify your deduction
   • You may also need the following California forms:
     1. Sales of Business Property (Schedule D-1)
        Schedule D-1 instructions
     2. Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations Individuals, Estates, and Trusts (FTB 3805V)
        FTB 3805V instructions
     3. Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations Corporations (FTB 3805Q)
        FTB 3805Q instructions

Visit Disaster Loss: How to Claim a State Tax Deduction (FTB Pub 1034) for more information.

Extended deadlines to file, pay, and make contributions

California has authority to postpone certain tax deadlines when there is a state of emergency declared by the Governor, or the President makes a major disaster declaration. For any given state of emergency or presidential disaster declaration, that triggers IRS tax relief/postponement in California, the State will evaluate any filing and or payment postponement in response to each declaration or emergency on a case-by-case basis, consistent with existing authority per Revenue and Taxation Code section 18572.

• There may be postponed deadlines for:
  • Filing tax returns
  • Paying income taxes
  • Making contributions to a traditional Individual Retirement Account (IRA) or Roth IRA
• Deadlines may be postponed up to 1 year (See IRS Tax Relief in Disaster Situations)
• Interest and penalties are canceled on the underpaid income tax for the length of any extended deadline period

Federal disaster relief

Taxpayers can find information on the most recent IRS tax relief provisions for those affected by disaster. Visit IRS Tax Relief in Disaster Situations for more information.

Taxpayers can search for disaster relief by state or year.

How to get a copy of your California tax return

We will replace your lost or damaged California tax returns at no cost to you.

1. Complete Request for Copy of Tax Return (FTB 3516)
2. Print the name of the disaster at the top of the form
3. We will send you copies of your most recently filed tax return

How to stop interest from accruing on taxes owed

For taxpayers who have filed tax returns claiming disaster relief, FTB will stop accrual of interest during the extension of time to file and pay when such relief is granted by the California Department of Finance.

Taxpayers should write the name of the disaster 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 taxpayers follow the guidance above and file timely and accurate returns, but are still assessed interest, they may request an abatement of the interest by completing Request for Abatement of Interests (FTB 3701).

Fax

916-843-6022

Mail

Executive and Advocate Services MS A381
Franchise Tax Board
PO Box 157
Sacramento CA 95741-0157

If we deny your request

You will receive a letter of denial explaining your right of appeal to the Office of Tax Appeals (OTA) within:

• 30 days in the case of any unpaid interest
• 90 days in the case of any paid interest

Visit Procedure for Appealing a Denial of a Request for Abatement of Interest (FTB 5847I) for your appeal rights and actions.