California Nonresident Status and Alimony Taxability

[ptyh12]

Hi,

I would appreciate guidance on my California tax situation.

I lived in California from June, 2003 until I moved back to Thailand on July, 2023 and have been living here full-time since, with no return visits to California. I now live in Thailand permanently. I do not have a home, a car, employment, or physical presence in California. My California driver’s license has expired, and I have canceled my voter registration. I am a Thai citizen and also a U.S. citizen. I do have a home and a car and Thai bank accounts in Thailand 

I currently use a California mailing address for banking and brokerage accounts for convenience, but I do not reside there.

 My income consistent of:

- Alimony  (divorce finalized April 2023; payments began July 2023)

- Interest, dividends, and capital gains from U.S. brokerage accounts (Vanguard, Schwab, etc.)

My understanding is that, as a nonresident, interest, dividends, and capital gains are generally not California-source income. However, I am unsure whether alimony is considered California-source income for a nonresident living abroad.

My questions are:

1. Should I be treated as a California nonresident for 2024–2025?

2. Are my investment earnings taxable by California?

3. Is alimony considered California-source income in this situation?

4. Would I need to file Form 540NR, or no California return at all?

Thank you for your guidance.

[DoninGA · Accepted solution]

Since you did not live or work in California at any time in 2025 you do not file a CA state income tax return.

Alimony received is not sourced income from a state.

Investment income in 2025 cannot be taxed by CA since you did not live there or work there.

As a US citizen you are required to report all of your income, US and Foreign, on a US federal tax return.

When entering your personal information in TurboTax you are asked for a resident state.  Scroll down to the bottom of the dropdown list and select Foreign or US Possession.

[ptyh12]

Hi,

Thank you very much for your previous responses. I would like to clarify one important detail regarding my situation.

I am a California nonresident for 2024–2025, currently living in Thailand permanently.

However, my alimony is paid by my ex- spouse who lives and works in California, and our divorce was finalized in California in April 2023 (while I was still a California resident until July 2023).

My question is specifically:

If the payer (my ex-spouse) resides in California and the divorce agreement was executed in California, does that make the alimony California-source income for me as a nonresident?

Or is alimony generally considered non-California-source income regardless of the payer’s location?

I want to confirm whether this would require me to file a California nonresident return (Form 540NR), or if the alimony would not be taxable by California.

Thank you again 

[DoninGA]

@ptyh12 Since the divorce was finalized after December 31, 2018, none of the alimony payments you received are entered on a tax return.  The payments are not taxable income, so it is a moot point relative to your spouse being a CA resident.

[ptyh12]

Thank you very much. I appreciate your quick answer