@john_calcagni , IRAs are defined by federal statute, not state statute, so there can be no IRA contribution based on nontaxable alimony.
If California statute were to provide for some type of account other than an IRA to which you could make a contribution that was specially treated for California tax purposes, it would have to be explicitly established by California statute. Even if California statute provided for such an account, it would generally make no sense to contribute to such an account when it likely would make more sense to make a capital investment that would benefit from federal taxation at long-term capital gains rates. Further, such a special California account would still be treated on your federal tax return as if the account was an ordinary account because it would not be recognized for federal purposes as any kind of tax-deferred account.
