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Modeling Multiple State Residencies in Holistiplan

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.


Modeling multiple states within Scenario Analysis is on the development roadmap, but until that capability is live and available, here's a workaround:


Create two new scenarios for the client: 

  1. Scenario 1 for State A, and Scenario 2 for State B. Though users can only select one state at a time, when switching between states, the entries made in each state's scenario won't change.

  2. Make the entries for State A in Scenario 1 when A is selected, then select State B in the drop-down menu, and finally make the entries for State B in Scenario 2. All the data entries for each state will remain regardless of which state is selected.

     

  3. Accordingly, whene looking at Scenario 2 (State B), the information in the state tax section for State A (Scenario 1) will be irrelevant. But when switching the selected state to State A, the information in the state tax section for State B (Scenario 2) will be irrelevant.

  4. Sum up the relevant state tax data from each of the two scenarios to arrive at the total state tax implications across both states.

Example:

Let's say Austin and Lila are looking at a potential move from Pennsylvania to Alabama. We can model how their state tax bill would change within Scenario Analysis.

In the screenshot below, we have selected Pennsylvania as the state from the dropdown, and made our Pennsylvania-specific entries in Scenario 2. Scenario 1 contains our Alabama-specific entries and is irrelevant when Pennsylvania is selected.




Conversely, in the below screenshot we have now selected Alabama as the state, and made our Alabama-specific entries in Scenario 1. Scenario 2 contains our Pennsylvania-specific entries, and is irrelevant when Alabama is selected.




In summary we can see that Austin and Lila's income state tax bill, given the same income, deductions, and other information, would be $12,381 in Alabama, as opposed to $4,940 in Pennsylvania. Details for the federal tax projection will remain the same, since the state selected has no impact on the federal tax projection.

If there are income, deduction, or credit items that are applicable to one state but not another, make the additive or subtractive adjustments to those income, deduction, or credit entries to effectively "split" income across various states in the analysis.