The California Board of Appeals maintains the FTB’s omission of alimony withholding for divorced income taxpayers

The California Office of Tax Appeals (OTA) on February 16 upheld the Franchise Tax Board’s (FTB) decision denying taxpayers’ right to deduct child support payments for individual income tax purposes. The taxpayers jointly filed a state resident income tax return, claiming a deduction for alimony payments to the taxpayer’s husband’s ex-spouse. The FTB denied the input tax deduction and assessed the subsequent tax plus interest. Taxpayers have appealed. The OTA found: 1) the taxpayer husband’s payments to his ex-spouse were payments to satisfy his ex-spouse’s property rights and not spousal support payments; 2) The divorce agreement contained no indication that the …