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    crazee85's Avatar
    crazee85 Posts: 82, Reputation: 1
    Junior Member
    		  
    #1

    Feb 19, 2017, 04:41 PM
    CAVDI being considered tax deductible by HRBlock this year
    Hi,

    I generally file my taxes using HRBlock, and it has never considered the amount in CAVDI as deductible for my federal tax return.

    However, this year, I noticed that it has a separate dropdown for "CAVPDI (also CA VPDI, CAVDI, VI, VD)", and it is considering it as deductible for my taxes.

    Has any understanding regarding CAVDI changed?

    Thanks!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Feb 19, 2017, 05:04 PM
    Disability Insurance, as charged by the various states (New York, New Jersey and California are notably high), is considered a deductible state tax on your federal return.
    crazee85's Avatar
    crazee85 Posts: 82, Reputation: 1
    Junior Member
    		  
    #3

    Feb 19, 2017, 06:50 PM
    Oh! I thought it was not deductible based on opinion in this thread:
    https://www.askmehelpdesk.com/taxes/cavpdi-458007.html

    I have also found similar opinions at multitude other forums based on quick Google search.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Feb 19, 2017, 09:20 PM
    IF the payment is voluntary, then it cannot be deducted.

    However, most disability insurance payments are NOT voluntary.
    crazee85's Avatar
    crazee85 Posts: 82, Reputation: 1
    Junior Member
    		  
    #5

    Feb 19, 2017, 10:07 PM
    As I understand, the full form of CAVDI is California Voluntary Disability Insurance. However, in spite of the word "Voluntary" in there, I am not sure if this is considered voluntary or mandatory.

    I guess it is mandatory to contribute to either SDI or VDI, but does choosing to contribute to VDI make it voluntary, or does it stay mandatory?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #6

    Feb 19, 2017, 11:08 PM
    I neither work, live or practice in California, so I am not sure.
    crazee85's Avatar
    crazee85 Posts: 82, Reputation: 1
    Junior Member
    		  
    #7

    Mar 19, 2017, 04:37 PM
    I have figured that it is not deductible on the federal tax return per Rev. Rul. 81-194.

    Supporting links:
    IRS Revenue Ruling 81-194
    https://www.ftb.ca.gov/forms/updates..._Booklet.shtml
    https://www.taxact.com/tsupport/FAQD...?Question=1584
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #8

    Mar 19, 2017, 04:39 PM
    Good to know!
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