@smatthews51: My wife and I currently live in New York, but plan to move to New Hampshire in 2028. I have a US Military pension, and by 2028, my wife and I will both be on Social Security. As I run the models, the New Hampshire state tax situation seems to not be correct for my income sources. Although New Hampshire does have a high property tax when compared to other states, New Hampshire has no personal income tax, no sales tax, and no estate tax. Earned income is not taxed at all in New Hampshire. Social Security benefits are not taxed by the state. US Military retirement pensions are not taxed. Railroad Retirement benefits are not taxed.
Income from retirement plans is exempt from New Hampshire's interest and dividends tax. Although the state currently taxes dividends and interest from non-retirement plans that are over $2,400 (over $4,800 for joint filers), these are being phased out and will be totally eliminated in 2025 and beyond. (I&D over $2,400/$4,800 will be taxed at 3% in 2024).
I know that on the Home Screen, I can set an alternate state tax rate for each scenario. However, it does not allow the user to indicate when that alternate rate kicks in.
I know it is practically impossible for you to keep up with, and integrate into your product, the tax laws across all 50 states (plus DC and territories!). But you had included a note to let you know if we came across issues related to the tax laws across various jurisdictions. Hence this note....
Just to be clear: I mentioned that New Hampshire has a relatively high property tax. However, we will not own property in New Hampshire, and thus will not be paying any property taxes once we move to New Hampshire.
My wife and I should not be paying any State taxes after we have moved to New Hampshire. But, my models are showing $7,200-$26,000 a year in state taxes. The move to New Hampshire does not happen until 2028. I can set an alternate state tax rate as 0.00% for each scenario. However, the alternate state tax entry screen does not allow me to say when those alternative rates begin to be used within the each scenario. I don't want the models to use an alternative State tax rate while I am still a resident of New York State. I would not want alternative tax rates to start until 2028.
@yankeelaker I think you might be running a pre-v1.5 copy of PRC2024. We changed NH to a no-tax state in v1.5 (I think) because of the near-term phaseout of taxes on dividends and interest. So, I'd recommend that you download the latest version and verify that those taxes go away.
Stuart
@smatthews51 No, I'm using version 1.9. I am new at this, though, so I may have entered something wrong. It looks to be taxes based on realized capital gains, but I will keep scrubbing my inputs to make sure I did not enter something incorrectly.
@smatthews51 On the home page, there is an entry for "Local Tax Rate" which I have entered (4% for County/Town/School taxes) based on my current location in New York State. However, that rate will not apply (it should be zero) once I move to New Hampshire in 2028. Is the way the modeling is currently set up carrying the Local Tax Rate entry even into the time frame where I have entered that my state of residence changes?
@smatthews51 Apparently that is what is happening. I zeroed out the "Local Tax Rate" field on the Home page for my Scenario 1 and, after recalculating that scenario, the "State and Local Income Tax" in the tabular view for Scenario 1 went to zero after the year of my move to New Hampshire. Of course, that lowered my State tax liability during the few years that I remain in New York.
What I will do is run all scenarios WITH the 4% "Local Tax Rate" entry, and see what the State tax amounts are between now and 2028 when I am still in New York and subject to that "Local Tax Rate." I will then reset the "Local Tax Rate" to zero, and see again what the State tax amounts show for my years in New York under that condition. I will then, for each scenario, enter the difference as miscellaneous expenses for the appropriate years, and zero out the "Local Tax Rate" field for all years. I think that will get me close enough to reality to make me happy.
For the future, you might consider having the ability to enter different "Local Tax Rates" when a state of residence changes. Perhaps with start year/stop year for use of the "Local Tax Rate" in each location, as well.
@yankeelaker Ahha, good catch! This is being corrected in the initial release of Pralana Online. For now, it sounds like you've got a workaround. Thanks for your feedback on this!
Stuart
I’m running into this with Pennsylvania, which does not have income tax on IRA/401k distribution or SS. Even if I set it manually to zero it still shows a tax liability in future years.
@jjodod John, would you please elaborate on the issue you're seeing?
Thanks, Stuart
If I enter my state and local income tax (5.07%) as shown in the screenshot, the Tabular state tax projection shows local and state tax due as per the second screenshot. PA does not tax SS or IRA/401k withdrawals. If I enter zero for star taxes, I still get some tax due, although less in screenshot 3.
