policyengine-us 1.400.1__py3-none-any.whl → 1.401.0__py3-none-any.whl

policyengine_us/tests/policy/baseline/gov/states/nm/tax/income/deductions/nm_itemized_deductions.yaml

@@ -0,0 +1,47 @@
+- name: New Mexico adopts federal itemized deductions
+  period: 2023
+  input:
+    state_code: NM
+    filing_status: SINGLE
+    age_head: 35
+    charitable_deduction: 5_000
+    interest_deduction: 8_000
+    salt_deduction: 10_000
+    medical_expense_deduction: 2_000
+  output:
+    # Federal itemized deductions total
+    total_itemized_taxable_income_deductions: 25_000
+    # NM uses federal itemized deductions
+    nm_itemized_deductions: 25_000
+    # Should flow through to state_itemized_deductions
+    state_itemized_deductions: 25_000
+
+- name: New Mexico itemized deductions for married couple
+  period: 2023
+  input:
+    state_code: NM
+    filing_status: JOINT
+    age_head: 45
+    age_spouse: 43
+    charitable_deduction: 10_000
+    interest_deduction: 15_000
+    salt_deduction: 10_000
+  output:
+    total_itemized_taxable_income_deductions: 35_000
+    nm_itemized_deductions: 35_000
+    state_itemized_deductions: 35_000
+
+- name: New Mexico itemized deductions for head of household
+  period: 2023
+  input:
+    state_code: NM
+    filing_status: HEAD_OF_HOUSEHOLD
+    age_head: 38
+    charitable_deduction: 3_000
+    interest_deduction: 7_000
+    salt_deduction: 8_000
+    medical_expense_deduction: 1_500
+  output:
+    total_itemized_taxable_income_deductions: 19_500
+    nm_itemized_deductions: 19_500
+    state_itemized_deductions: 19_500

policyengine_us/tests/policy/baseline/gov/states/tax/income/state_itemized_deductions.yaml

@@ -0,0 +1,180 @@
+- name: Federal itemized deductions adopted for Connecticut
+  period: 2023
+  input:
+    state_code: CT
+    filing_status: SINGLE
+    age_head: 30
+    # Set the individual federal deduction components directly
+    charitable_deduction: 5_000
+    interest_deduction: 8_000
+    salt_deduction: 10_000
+  output:
+    # State should use sum of federal itemized deduction components
+    state_itemized_deductions: 23_000
+
+- name: Federal itemized deductions adopted for Georgia
+  period: 2023
+  input:
+    state_code: GA
+    filing_status: JOINT
+    age_head: 40
+    age_spouse: 38
+    # Set the individual federal deduction components directly
+    charitable_deduction: 10_000
+    interest_deduction: 15_000
+    salt_deduction: 10_000
+  output:
+    # State should use sum of federal itemized deduction components
+    state_itemized_deductions: 35_000
+
+- name: State-specific itemized deductions for New York
+  period: 2023
+  input:
+    state_code: NY
+    filing_status: SINGLE
+    age_head: 35
+    adjusted_gross_income: 80_000
+    # NY has its own calculation that we set directly
+    ny_itemized_deductions: 15_000
+  output:
+    state_itemized_deductions: 15_000
+
+- name: Federal itemized deductions adopted for Utah
+  period: 2023
+  input:
+    state_code: UT
+    filing_status: JOINT
+    age_head: 45
+    age_spouse: 43
+    charitable_deduction: 7_500
+    interest_deduction: 12_000
+    salt_deduction: 8_000
+  output:
+    # State should use sum of federal itemized deduction components
+    state_itemized_deductions: 27_500
+
+- name: New Mexico uses federal itemized deductions through its own implementation
+  period: 2023
+  input:
+    state_code: NM
+    filing_status: HEAD_OF_HOUSEHOLD
+    age_head: 38
+    charitable_deduction: 4_000
+    interest_deduction: 9_000
+    salt_deduction: 7_000
+  output:
+    # NM uses federal itemized deductions via nm_itemized_deductions
+    total_itemized_taxable_income_deductions: 20_000
+    nm_itemized_deductions: 20_000
+    state_itemized_deductions: 20_000
+
+- name: Montana check for individual vs joint itemization
+  period: 2023
+  input:
+    state_code: MT
+    filing_status: HEAD_OF_HOUSEHOLD
+    age_head: 38
+    charitable_deduction: 4_000
+    interest_deduction: 9_000
+    salt_deduction: 7_000
+  output:
+    # NM uses federal itemized deductions via nm_itemized_deductions
+    total_itemized_taxable_income_deductions: 20_000
+    mt_itemized_deductions_for_federal_itemization_indiv: 2_000
+    mt_itemized_deductions_for_federal_itemization_joint: 4_000
+    state_itemized_deductions: 4_000
+
+- name: Montana maximum logic - joint higher
+  period: 2023
+  input:
+    state_code: MT
+    filing_status: JOINT
+    age_head: 40
+    age_spouse: 38
+    # Set up scenario where joint calculation is higher
+    mt_itemized_deductions_for_federal_itemization_indiv: 8_000
+    mt_itemized_deductions_for_federal_itemization_joint: 12_000
+  output:
+    # Should take the maximum (joint in this case)
+    state_itemized_deductions: 12_000
+
+- name: Montana maximum logic - individual higher
+  period: 2023
+  input:
+    state_code: MT
+    filing_status: SEPARATE
+    age_head: 35
+    # Set up scenario where individual calculation is higher
+    mt_itemized_deductions_for_federal_itemization_indiv: 15_000
+    mt_itemized_deductions_for_federal_itemization_joint: 10_000
+  output:
+    # Should take the maximum (individual in this case)
+    state_itemized_deductions: 15_000
+
+- name: Iowa maximum logic - joint higher
+  period: 2023
+  input:
+    state_code: IA
+    filing_status: JOINT
+    age_head: 42
+    age_spouse: 40
+    # Set up scenario where joint calculation is higher
+    ia_itemized_deductions_indiv: 6_000
+    ia_itemized_deductions_joint: 9_000
+  output:
+    # Should take the maximum (joint in this case)
+    state_itemized_deductions: 9_000
+
+- name: Iowa maximum logic - individual higher
+  period: 2023
+  input:
+    state_code: IA
+    filing_status: SEPARATE
+    age_head: 45
+    # Set up scenario where individual calculation is higher
+    ia_itemized_deductions_indiv: 11_000
+    ia_itemized_deductions_joint: 7_000
+  output:
+    # Should take the maximum (individual in this case)
+    state_itemized_deductions: 11_000
+
+- name: Delaware maximum logic - joint higher
+  period: 2023
+  input:
+    state_code: DE
+    filing_status: JOINT
+    age_head: 38
+    age_spouse: 35
+    # Set up scenario where joint calculation is higher
+    de_itemized_deductions_indv: 4_500
+    de_itemized_deductions_joint: 8_200
+  output:
+    # Should take the maximum (joint in this case)
+    state_itemized_deductions: 8_200
+
+- name: Delaware maximum logic - individual higher
+  period: 2023
+  input:
+    state_code: DE
+    filing_status: SEPARATE
+    age_head: 42
+    # Set up scenario where individual calculation is higher
+    de_itemized_deductions_indv: 12_500
+    de_itemized_deductions_joint: 9_800
+  output:
+    # Should take the maximum (individual in this case)
+    state_itemized_deductions: 12_500
+
+- name: Arkansas maximum logic - joint higher
+  period: 2023
+  input:
+    state_code: AR
+    filing_status: JOINT
+    age_head: 46
+    age_spouse: 44
+    # Set up scenario where joint calculation is higher
+    ar_itemized_deductions_indiv: 3_800
+    ar_itemized_deductions_joint: 7_600
+  output:
+    # Should take the maximum (joint in this case)
+    state_itemized_deductions: 7_600

policyengine_us/tests/policy/baseline/gov/states/tax/income/state_standard_deduction.yaml

@@ -0,0 +1,178 @@
+- name: Federal standard deduction adopted for Connecticut
+  period: 2023
+  input:
+    state_code: CT
+    filing_status: SINGLE
+    age_head: 30
+  output:
+    standard_deduction: 13_850
+    state_standard_deduction: 13_850
+
+- name: Federal standard deduction adopted for Utah married couple
+  period: 2023
+  input:
+    state_code: UT
+    filing_status: JOINT
+    age_head: 35
+    age_spouse: 33
+  output:
+    standard_deduction: 27_700
+    state_standard_deduction: 27_700
+
+- name: State-specific deduction for Georgia
+  period: 2023
+  input:
+    state_code: GA
+    filing_status: SINGLE
+    age_head: 30
+    adjusted_gross_income: 50_000
+  output:
+    ga_standard_deduction: 5_400
+    state_standard_deduction: 5_400
+
+- name: State-specific deduction for New York
+  period: 2023
+  input:
+    state_code: NY
+    filing_status: JOINT
+    age_head: 40
+    age_spouse: 38
+    adjusted_gross_income: 100_000
+  output:
+    ny_standard_deduction: 16_050
+    state_standard_deduction: 16_050
+
+- name: State-specific deduction for Montana
+  period: 2023
+  input:
+    state_code: MT
+    filing_status: JOINT
+    age_head: 40
+    age_spouse: 38
+    adjusted_gross_income: 20_000
+  output:
+    mt_standard_deduction_indiv: 2_460
+    mt_standard_deduction_joint: 4_920
+    state_standard_deduction: 4_920
+
+- name: Montana standard deduction maximum logic - joint higher
+  period: 2023
+  input:
+    state_code: MT
+    filing_status: JOINT
+    age_head: 45
+    age_spouse: 43
+    # Set up scenario where joint calculation is higher
+    mt_standard_deduction_indiv: 3_000
+    mt_standard_deduction_joint: 5_000
+  output:
+    # Should take the maximum (joint in this case)
+    state_standard_deduction: 5_000
+
+- name: Montana standard deduction maximum logic - individual higher
+  period: 2023
+  input:
+    state_code: MT
+    filing_status: SEPARATE
+    age_head: 35
+    # Set up scenario where individual calculation is higher
+    mt_standard_deduction_indiv: 8_000
+    mt_standard_deduction_joint: 6_000
+  output:
+    # Should take the maximum (individual in this case)
+    state_standard_deduction: 8_000
+
+- name: Iowa standard deduction maximum logic - joint higher
+  period: 2023
+  input:
+    state_code: IA
+    filing_status: JOINT
+    age_head: 42
+    age_spouse: 40
+    # Set up scenario where joint calculation is higher
+    ia_standard_deduction_indiv: 2_500
+    ia_standard_deduction_joint: 4_000
+  output:
+    # Should take the maximum (joint in this case)
+    state_standard_deduction: 4_000
+
+- name: Iowa standard deduction maximum logic - individual higher
+  period: 2023
+  input:
+    state_code: IA
+    filing_status: SEPARATE
+    age_head: 38
+    # Set up scenario where individual calculation is higher
+    ia_standard_deduction_indiv: 7_000
+    ia_standard_deduction_joint: 5_500
+  output:
+    # Should take the maximum (individual in this case)
+    state_standard_deduction: 7_000
+
+- name: Delaware standard deduction maximum logic - joint higher
+  period: 2023
+  input:
+    state_code: DE
+    filing_status: JOINT
+    age_head: 40
+    age_spouse: 37
+    # Set up scenario where joint calculation is higher
+    de_standard_deduction_indv: 3_200
+    de_standard_deduction_joint: 6_400
+  output:
+    # Should take the maximum (joint in this case)
+    state_standard_deduction: 6_400
+
+- name: Delaware standard deduction maximum logic - individual higher
+  period: 2023
+  input:
+    state_code: DE
+    filing_status: SEPARATE
+    age_head: 45
+    # Set up scenario where individual calculation is higher
+    de_standard_deduction_indv: 8_500
+    de_standard_deduction_joint: 7_000
+  output:
+    # Should take the maximum (individual in this case)
+    state_standard_deduction: 8_500
+
+- name: Arkansas standard deduction maximum logic - joint higher
+  period: 2023
+  input:
+    state_code: AR
+    filing_status: JOINT
+    age_head: 44
+    age_spouse: 41
+    # Set up scenario where joint calculation is higher
+    ar_standard_deduction_indiv: 2_340
+    ar_standard_deduction_joint: 4_680
+  output:
+    # Should take the maximum (joint in this case)
+    state_standard_deduction: 4_680
+
+- name: Mississippi standard deduction maximum logic - joint higher
+  period: 2023
+  input:
+    state_code: MS
+    filing_status: JOINT
+    age_head: 39
+    age_spouse: 36
+    # Set up scenario where joint calculation is higher
+    ms_standard_deduction_indiv: 2_300
+    ms_standard_deduction_joint: 4_600
+  output:
+    # Should take the maximum (joint in this case)
+    state_standard_deduction: 4_600
+
+- name: Kentucky standard deduction maximum logic - individual higher
+  period: 2023
+  input:
+    state_code: KY
+    filing_status: SEPARATE
+    age_head: 41
+    # Set up scenario where individual calculation is higher
+    ky_standard_deduction_indiv: 3_400
+    ky_standard_deduction_joint: 2_650
+  output:
+    # Should take the maximum (individual in this case)
+    state_standard_deduction: 3_400

policyengine_us/variables/gov/irs/income/taxable_income/adjusted_gross_income/irs_gross_income/social_security/tax_unit_taxable_social_security.py

@@ -49,26 +49,42 @@ class tax_unit_taxable_social_security(Variable):
             0, combined_income - adjusted_base_amount
         )
 
-        amount_if_under_second_threshold = p.rate.base * min_(
-            combined_income_excess, gross_ss
+        # Tier 1: Between base and adjusted base thresholds
+        # Per IRC §86(a)(1), "the amount determined under paragraph (1)"
+        # Taxable amount is lesser of:
+        # - base.benefit_cap * SS benefits [§86(a)(1)(A)]
+        # - base.excess * excess over base [§86(a)(1)(B)]
+        amount_under_paragraph_1 = min_(
+            p.rate.base.benefit_cap * gross_ss,
+            p.rate.base.excess * combined_income_excess,
         )
+
+        # Tier 2: Above adjusted base threshold
+        # Per IRC §86(a)(2)(A)(ii), the lesser of:
+        # - "the amount determined under paragraph (1)" (calculated above)
+        # - "one-half of the difference between the adjusted base amount and the base amount"
+        bracket_amount = min_(
+            amount_under_paragraph_1,
+            p.rate.additional.bracket * (adjusted_base_amount - base_amount),
+        )
+
+        # Per IRC §86(a)(2), the lesser of:
+        # (A) 85% of excess over adjusted base + bracket amount, or
+        # (B) 85% of social security benefits
         amount_if_over_second_threshold = min_(
-            p.rate.additional * excess_over_adjusted_base
-            + min_(
-                amount_if_under_second_threshold,
-                p.rate.base * (adjusted_base_amount - base_amount),
-            ),
-            p.rate.additional * gross_ss,
+            p.rate.additional.excess * excess_over_adjusted_base
+            + bracket_amount,
+            p.rate.additional.benefit_cap * gross_ss,
         )
+
         return select(
             [
                 under_first_threshold,
                 under_second_threshold,
-                True,
             ],
             [
                 0,
-                amount_if_under_second_threshold,
-                amount_if_over_second_threshold,
+                amount_under_paragraph_1,
             ],
+            default=amount_if_over_second_threshold,
         )

policyengine_us/variables/gov/irs/income/taxable_income/deductions/tax_unit_itemizes.py

@@ -10,6 +10,7 @@ class tax_unit_itemizes(Variable):
     definition_period = YEAR
 
     def formula(tax_unit, period, parameters):
+
         if parameters(period).gov.simulation.branch_to_determine_itemization:
             # determine federal itemization behavior by comparing tax liability
             tax_liability_if_itemizing = tax_unit(
@@ -18,11 +19,29 @@ class tax_unit_itemizes(Variable):
             tax_liability_if_not_itemizing = tax_unit(
                 "tax_liability_if_not_itemizing", period
             )
-            return tax_liability_if_itemizing < tax_liability_if_not_itemizing
+            state_standard_deduction = tax_unit(
+                "state_standard_deduction", period
+            )
+            state_itemized_deductions = tax_unit(
+                "state_itemized_deductions", period
+            )
+            # Use a small tolerance for floating-point comparison due to floating point imprecision
+            TOLERANCE = 0.0001
+            federal_tax_equal = (
+                np.abs(
+                    tax_liability_if_itemizing - tax_liability_if_not_itemizing
+                )
+                <= TOLERANCE
+            )
+            return where(
+                federal_tax_equal,
+                state_standard_deduction < state_itemized_deductions,
+                tax_liability_if_itemizing < tax_liability_if_not_itemizing,
+            )
         else:
-            # determine federal itemization behavior by comparing deductions
             standard_deduction = tax_unit("standard_deduction", period)
             itemized_deductions = tax_unit(
                 "itemized_taxable_income_deductions", period
             )
+            # determine federal itemization behavior by comparing deductions
             return itemized_deductions > standard_deduction

policyengine_us/variables/gov/states/ia/tax/income/including_married_filing_separately/deductions/ia_standard_deduction_indiv.py

@@ -34,8 +34,6 @@ class ia_standard_deduction_indiv(Variable):
                 fsvals.SURVIVING_SPOUSE,
             ],
         )
-        is_head = person("is_tax_unit_head", period)
-        is_spouse = person("is_tax_unit_spouse", period)
         p = parameters(period).gov.states.ia.tax.income.deductions.standard
 
         if p.applies_federal:

policyengine_us/variables/gov/states/la/tax/income/deductions/la_standard_deduction.py

@@ -11,5 +11,7 @@ class la_standard_deduction(Variable):
 
     def formula(tax_unit, period, parameters):
         p = parameters(period).gov.states.la.tax.income.deductions.standard
-        filing_status = tax_unit("filing_status", period)
-        return p.amount[filing_status]
+        if p.applies:
+            filing_status = tax_unit("filing_status", period)
+            return p.amount[filing_status]
+        return 0

policyengine_us/variables/gov/states/me/tax/income/taxable_income/deductions/me_itemized_deductions_pre_phaseout.py

@@ -14,8 +14,6 @@ class me_itemized_deductions_pre_phaseout(Variable):
     defined_for = StateCode.ME
 
     def formula(tax_unit, period, parameters):
-        # Whether or not the taxpayer itemized for federal taxes.
-        us_itemizing = tax_unit("tax_unit_itemizes", period)
 
         # Get the Maine itemizing deduction parameters.
         p = parameters(period).gov.states.me.tax.income.deductions.itemized
@@ -36,4 +34,4 @@ class me_itemized_deductions_pre_phaseout(Variable):
         capped_deduction_no_med = min_(deduction_no_med, p.cap)
 
         # Add back medical and dental expenses (which are not capped).
-        return us_itemizing * (capped_deduction_no_med + medical_expenses)
+        return capped_deduction_no_med + medical_expenses

policyengine_us/variables/gov/states/me/tax/income/taxable_income/me_deductions.py

@@ -19,10 +19,13 @@ class me_deductions(Variable):
 
         # Get the relevant deduction amount (Line 6).
         # Either itemized deduction or federal standard deduction.
-        max_deduction = max_(
+        itemizes = tax_unit("tax_unit_itemizes", period)
+        standard_deduction = tax_unit("standard_deduction", period)
+        larger_deduction = max_(
             tax_unit("me_itemized_deductions_pre_phaseout", period),
-            tax_unit("standard_deduction", period),
+            standard_deduction,
         )
+        max_deduction = where(itemizes, larger_deduction, standard_deduction)
 
         # Calculate the phaseout amount (Line 7).
         phaseout_amount = max_deduction * phaseout_percent

policyengine_us/variables/gov/states/mt/tax/income/deductions/itemized/federal_itemization/README.md

@@ -0,0 +1 @@
+# These files are used for the calculation of the federal itemization choice to avoid circular reference errors regarding the federal tax deduction. They are not applied in the final Montana income tax calculation. 

policyengine_us/variables/gov/states/mt/tax/income/deductions/itemized/federal_itemization/mt_federal_income_tax_deduction_for_federal_itemization.py

@@ -0,0 +1,26 @@
+from policyengine_us.model_api import *
+
+
+class mt_federal_income_tax_deduction_for_federal_itemization(Variable):
+    value_type = float
+    entity = TaxUnit
+    definition_period = YEAR
+    label = "Montana federal income tax deduction for the entire tax unit"
+    reference = (
+        "https://law.justia.com/codes/montana/2021/title-15/chapter-30/part-21/section-15-30-2131/"
+        # MT Code § 15-30-2131 (2021) (1)(b)
+    )
+    unit = USD
+    defined_for = StateCode.MT
+
+    def formula(tax_unit, period, parameters):
+        filing_status = tax_unit("filing_status", period)
+        p = parameters(
+            period
+        ).gov.states.mt.tax.income.deductions.itemized.federal_income_tax
+        federal_income_tax_limit = p.cap[filing_status]
+
+        withheld_income_tax = tax_unit("mt_withheld_income_tax", period)
+        # The federal income tax deduction is attributed to the head in any case
+        # as we currently do not have a way to determine individual federal income tax before credits.
+        return min_(withheld_income_tax, federal_income_tax_limit)

policyengine_us/variables/gov/states/mt/tax/income/deductions/itemized/federal_itemization/mt_federal_income_tax_deduction_for_federal_itemization_indiv.py

@@ -0,0 +1,34 @@
+from policyengine_us.model_api import *
+
+
+class mt_federal_income_tax_deduction_for_federal_itemization_indiv(Variable):
+    value_type = float
+    entity = Person
+    definition_period = YEAR
+    label = "Montana federal income tax deduction when married couples are filing separately"
+    reference = (
+        "https://law.justia.com/codes/montana/2021/title-15/chapter-30/part-21/section-15-30-2131/"
+        # MT Code § 15-30-2131 (2021) (1)(b)
+    )
+    unit = USD
+    defined_for = StateCode.MT
+
+    def formula(person, period, parameters):
+        unit_deds = person.tax_unit(
+            "mt_federal_income_tax_deduction_for_federal_itemization", period
+        )
+        person_agi = person("mt_agi", period)
+        total_agi = person.tax_unit.sum(person_agi)
+
+        prorate = np.zeros_like(total_agi)
+        mask = total_agi > 0
+        prorate[mask] = person_agi[mask] / total_agi[mask]
+        filing_status = person.tax_unit(
+            "state_filing_status_if_married_filing_separately_on_same_return",
+            period,
+        )
+        p = parameters(
+            period
+        ).gov.states.mt.tax.income.deductions.itemized.federal_income_tax
+        cap = p.cap[filing_status]
+        return min_(unit_deds * prorate, cap)

policyengine_us/variables/gov/states/mt/tax/income/deductions/itemized/federal_itemization/mt_itemized_deductions_for_federal_itemization_indiv.py

@@ -0,0 +1,41 @@
+from policyengine_us.model_api import *
+
+
+class mt_itemized_deductions_for_federal_itemization_indiv(Variable):
+    value_type = float
+    entity = Person
+    label = "Montana itemized deductions when married couples are filing separately"
+    unit = USD
+    definition_period = YEAR
+    reference = (
+        "https://mtrevenue.gov/wp-content/uploads/dlm_uploads/2023/05/Montana-Idividiual-Income-Tax-Return-Form-2-2022v6.2.pdf#page=7"
+        "https://law.justia.com/codes/montana/2022/title-15/chapter-30/part-21/section-15-30-2131/"
+        # MT Code § 15-30-2131 (2022) (1)
+    )
+    defined_for = StateCode.MT
+
+    def formula(person, period, parameters):
+        p = parameters(period).gov.irs.deductions
+        # Since we only compute the federal charitable deduction at the tax unit level,
+        # we will split the value between each spouse
+        charitable_deduction = (
+            person.tax_unit("charitable_deduction", period) * 0.5
+        )
+        head_or_spouse = person("is_tax_unit_head_or_spouse", period)
+        # The interest deduction is the sum of mortagage and investment interest expenses
+        investment_interest = person("investment_interest_expense", period)
+        mortgage_interest = person("mortgage_interest", period)
+        interest_ded = investment_interest + mortgage_interest
+        other_deductions = add(
+            person,
+            period,
+            [
+                "mt_misc_deductions",
+                "mt_medical_expense_deduction_indiv",
+                "mt_salt_deduction",
+                "mt_federal_income_tax_deduction_for_federal_itemization_indiv",
+            ],
+        )
+        return head_or_spouse * (
+            interest_ded + charitable_deduction + other_deductions
+        )