Are you helping your client model the impact of moving to a different state, or do they have income split across more than one state return? Here's how to handle that in Scenario Analysis.
To model state taxes within Holistiplan, you will first need to be subscribed to the State Taxes feature. If you would like more information on the State Taxes feature, you can read more about that feature and how to sign up in our article below:
State Taxes in Holistiplan
You'll want to create two new scenarios for the client. Scenario 2 would be for State A and Scenario 3 would be for State B. Though you can only select one state at a time, when you switch between states, the entries you made in each state's scenario won't change. You would make the entries for State A in Scenario 2 when A is selected, then select State B in the drop-down menu, and finally make the entries for State B in Scenario 3. All the data entries for each state will remain regardless of which state is selected.
Accordingly, when you're looking at Scenario 3 (State B), the information in the state tax section for State A (Scenario 2) will be irrelevant. But, when you switch the selected state to State A, the information in the state tax section for State B (Scenario 3) will be irrelevant. You can then sum up the "relevant" state tax data from each of the two scenarios to arrive at your total state tax implications across both states.
Example:
Let's say Peter and Paula Professor are looking at a potential move to New York from South Carolina. We can model how their state tax bill would change within Scenario Analysis.
In the below screen shot we have selected South Carolina as the state, and made our South Carolina-specific entries in Scenario 2. Scenario 3 contains our New York-specific entries, and is irrelevant when South Carolina is selected.
Conversely, in the below screen shot we have now selected New York as the state, and made our New York-specific entries in Scenario 3. Scenario 2 contains our South Carolina-specific entries, and is irrelevant when New York is selected.
In summary we can see that Peter and Paula's state tax bill, given the same income, deductions, and other information, would be $8,567 in South Carolina, as opposed to $12,354 in New York. Details for the federal tax projection will remain the same, since the state selected has no impact on the federal tax projection.
Note: If you have income, deduction, or credit items that are applicable to one state but not another, you will need to make the additive or subtractive adjustments to those income, deduction, or credit entries to effectively "split" income across various states in the analysis.
Admittedly this isn't perfect, as you still need to identify the income that only belongs to each state. But it's a step in the right direction. Multi-state functionality is on the development roadmap, but until that capability is live and available, we hope this solution is a satisfactory workaround. Please let us know if you have any other questions!