1. Home
  2. Taxes General Forum
  3. Annual CA-VPDI discussion

Annual CA-VPDI discussion

"Enter total of federal Schedule A (Form 1040), line 5 (State Disability Insurance, Voluntary Plan Disability Insurance, and state and local income tax, or General Sales Tax) and line 8 (foreign taxes only). See instructions." The instructions simply reinforce the assumption that Line 5 of federal Schedule A (Form 1040) may contain VPDI. So, it seems clear that the CA Franchise Tax Board believes CA-VPDI may be deductible on the federal return. Or are they just making it clear that, whether or not it's deductible on the federal return (which is ambiguous at best), it is definitely NOT deductible on the state return? Damian [always does his own taxes by hand]

> > > > > > > > >
Reply to
Damian Menscher
Loading thread data ...

Well, I went back and reviewed the same discussion, and then looked to see whether there was anything new on this subject from the IRS. It appears that Rev. Rul. 81-194 has not been superseded or modified, nor have the other rulings the IRS issued on similar plans (Rev Ruls. 81-192 and 193, one relating to NY and the other to NJ plans) at the same time. So my opinion, for whatever it's worth, is VPDI is not deductible for federal income tax purposes (by the employee). I'm not sure the FTB form instructions are intended to express an opinion about that' they just want to make it clear that none of these payments are deductible for state purposes. However, Dieter Stussy, who is a former IRS Revenue Agent in California, said that in his day, at least, the IRS agents did not distinguish between SDI and VPDI for deduction purposes. And as several of us pointed out in the 2003 discussion, the amounts are so small, taxpayer by taxpayer, that it is unlikely that anyone would make an issue of it. So ... let your conscience be your guide .

Katie in San Diego

Reply to
Katie

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.