State Taxes in Holistiplan

Premium subscribers can model income taxes at the state level in Scenario Analysis.

What can Holistiplan do with state taxes?

Holistiplan has always provided State Tax Hints on Tax Reports to help you identify state-specific tax items. You can enable those state tax hints by making sure a state is selected in the client household.



With the new state tax modeling feature, you can go beyond state tax hints and model not only federal tax projections in Scenario Analysis, but state tax projections as well. We've officially added calculation support for state taxes in the Scenario Analysis screen. This will allow advisors to model how a given income event will impact their clients at the federal and state levels.

How do I enroll in the state tax modeling feature?

A user with Firm Administrator privileges for your firm's Holistiplan account will be able to access the link in the "State Tax Modeling" section with Scenario Analysis shown below or by navigating to Settings > Subscription, where they will be able to enroll in the state tax modeling add-on feature for all users in your firm.

How does it work?

After enabling the state taxes feature,  you'll find a new section in Scenario Analysis right after the "Refundable Tax Credits" section and just before the "MAGI" section.

Please note, the system-generated Scenario 1 represents an uploaded return, you will not see any of state tax information. This is because Holistiplan does not actually read in state tax returns, and uploaded state returns will be processed as unsupported. Scenarios representing uploaded returns will have a warning as a reminder. You can find all currently supported Forms and Schedules that our OCR software reads-in here.

Once you have enabled the State Tax Modeling feature, to begin projecting state taxes, select the state for which you which to model using the dropdown box outlined in red below, then click the "Add State Scenario" button outlined in blue. The "Add State Scenario" button will be present only on editable scenarios within Scenario Analysis. 

While Holistiplan will pull down into the State Tax Modeling section certain figures from the Federal aspects of the scenario, inevitably, some manual adjustments will need to be made to account for state-specific tax provisions that cannot be automatically calculated currently. All states are different, so some states will have more manual adjustments than others.

For example, many states begin with Federal AGI as a starting point, while others start with a state-specific income number that must be manually constructed. The (?) icons throughout the State Tax Modeling section may be helpful reminders of what various adjustments may be made for each state on each particular line item.

Also, you might find it helpful to check out more information on various states, by clicking the "Open State Tax Modeling informational page" link below, which will list all states, and an outline of the flow of each state's tax calculation. An example for North Carolina's page is included below as well.

Lastly, you can click on the calculator icon for the State Tax Modeling section to see the math under the hood for each state tax calculation, which will mimic the flow of calculation on each state's income tax return form. This "State Tax" line item calculation audit can be seen on the final screenshot below.

Once the State Tax Modeling section is enabled, you'll also see a "State Tax Withholding Calculator" show up beneath the existing Federal Tax Withholding Calculator section that persists for all users. Like Federal withholding, state withholding will be greyed out for the scenario with the read-in return; however, in editable scenarios where a state scenario has been added, you can add in state tax withholding information, as seen below.




Currently, modeling multiple state residences is not supported within Holistiplan. There is a workaround you can use in the meantime, though it takes a bit of work to set up. You can learn how to use that workaround by checking out our article linked here. We know this workaround is not perfect, and will continue to evaluate possibilities for future enhancements in this area.

If you have any questions along the way, please Contact our Support Team for assistance.