New York CTC computation fixes

changelog_entry.yaml

@@ -0,0 +1,4 @@
+- bump: minor
+  changes:
+    fixed:
+    - New York empire state child credit.

policyengine_us/parameters/gov/states/ny/tax/income/credits/ctc/amount/base.yaml

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+description: New York provides this base amount for the child tax credit per child.
+values:
+  2018-01-01: 1_000
+metadata:
+  unit: currency-USD
+  period: year
+  label: New York CTC base amount
+  reference:
+    - title: Instructions for Form IT-213 Claim for Empire State Child Credit
+      href: https://www.tax.ny.gov/pdf/2021/inc/it213i_2021.pdf#page=2

policyengine_us/parameters/gov/states/ny/tax/income/credits/ctc/amount/match.yaml

@@ -0,0 +1,10 @@
+description: New York shares this fraction of adjusted federal amount for the child tax credit.
+values:
+  2018-01-01: 0.05 
+metadata:
+  unit: /1
+  period: year 
+  label: New York CTC share of federal adjusted credit
+  reference:
+    - title: Instructions for Form IT-213 Claim for Empire State Child Credit
+      href: https://www.tax.ny.gov/pdf/2021/inc/it213i_2021.pdf#page=2 #5%

policyengine_us/parameters/gov/states/ny/tax/income/credits/ctc/amount/minimum.yaml

@@ -1,10 +1,10 @@
-description: Minimum amount for New York's Empire State Child Credit per child
+description: New York limits the child tax credit per child to this amount.
 values:
   2018-01-01: 100
 metadata:
   unit: currency-USD
   period: year
-  label: NY CTC minimum amount
+  label: New York CTC minimum amount
   reference:
     - title: Section 606 Credits against tax (c-1)
       href: https://www.nysenate.gov/legislation/laws/TAX/606

policyengine_us/parameters/gov/states/ny/tax/income/credits/ctc/amount/percent.yaml

@@ -1,9 +1,10 @@
-description: New York's Empire State Child Credit share of federal credit
+description: New York shares this fraction of federal credit for the child tax credit.
 values:
   2018-01-01: 0.33
 metadata:
   unit: /1
-  label: NY CTC share of federal credit
+  period: year 
+  label: New York CTC share of federal credit
   reference:
     - title: Section 606 Credits against tax (c-1)
       href: https://www.nysenate.gov/legislation/laws/TAX/606

policyengine_us/parameters/gov/states/ny/tax/income/credits/ctc/minimum_age.yaml

@@ -1,9 +1,9 @@
-description: Minimum age to qualify for New York's Empire State Child Credit
+description: New York limits the child tax credit for child equal or above this age.
 values:
   2018-01-01: 4
 metadata:
   unit: year
-  label: NY CTC minimum age
+  label: New York CTC minimum age
   reference:
     - title: Section 606 Credits against tax (c-1)
       href: https://www.nysenate.gov/legislation/laws/TAX/606

policyengine_us/tests/policy/baseline/gov/states/ny/tax/income/credits/ny_ctc/ny_ctc_base_credit.yaml

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+- name: NY base credit is over reduced tax
+  period: 2021
+  input:
+    income_tax: 1_000
+    ny_ctc_federal_credits: 800
+    ny_ctc_pre_reduction_base_credit: 500
+    state_code: NY
+  output:
+    ny_ctc_base_credit: 200 #min(1_000 - 800,500)
+
+- name: NY base credit is below reduced tax
+  period: 2021
+  input:
+    income_tax: 1_000
+    ny_ctc_federal_credits: 500
+    ny_ctc_pre_reduction_base_credit: 300
+    state_code: NY
+  output:
+    ny_ctc_base_credit: 300 #min(1_000 - 500,300)
+
+- name: reduced tax capped at 0
+  period: 2021
+  input:
+    income_tax: 1_000
+    ny_ctc_federal_credits: 1_200
+    ny_ctc_pre_reduction_base_credit: 300
+    state_code: NY
+  output:
+    ny_ctc_base_credit: 0 #min(max(0,1_000 - 1200),300)

policyengine_us/tests/policy/baseline/gov/states/ny/tax/income/credits/ny_ctc/ny_ctc_claimed_additional_credits.yaml

@@ -0,0 +1,15 @@
+- name: Filer is eligible for NY CTC additional credit
+  period: 2021
+  input:
+    residential_clean_energy_credit: 500
+    state_code: NY
+  output:
+    ny_ctc_claimed_additional_credits: True
+
+- name: Filer is not eligible for NY CTC additional credit
+  period: 2021
+  input:
+    residential_clean_energy_credit: 0
+    state_code: NY
+  output:
+    ny_ctc_claimed_additional_credits: False

policyengine_us/tests/policy/baseline/gov/states/ny/tax/income/credits/ny_ctc/ny_ctc_federal_credits.yaml

@@ -0,0 +1,11 @@
+- name: NY Worksheet A/B for Form IT-213 federal credit computation
+  period: 2021
+  input:
+    foreign_tax_credit: 300
+    cdcc: 0
+    education_tax_credits: 400
+    savers_credit: 200
+    elderly_disabled_credit: 100
+    state_code: NY
+  output:
+    ny_ctc_federal_credits: 1_000

policyengine_us/tests/policy/baseline/gov/states/ny/tax/income/credits/ny_ctc/ny_ctc_pre_reduction_base_credit.yaml

@@ -0,0 +1,96 @@
+- name: NY CTC pre reduction base credit if claimed additional credit and no deduction
+  period: 2021
+  input:
+    ctc_qualifying_children: 3
+    adjusted_gross_income: 100_000
+    ny_ctc_claimed_additional_credits: 1_000 
+    # >0 then agi_with_exclusion_amount = 100_700 < threshold = 200_000
+    foreign_earned_income_exclusion: 500
+    puerto_rico_income: 200
+    filing_status: SINGLE
+    state_code: NY
+  output:
+    ny_ctc_pre_reduction_base_credit: 3_000
+    # base = 3 * 1_000 = 3_000
+
+- name: NY CTC pre reduction base credit if claimed additional credit with deduction, cappted at 0
+  period: 2021
+  input:
+    ctc_qualifying_children: 3
+    adjusted_gross_income: 300_000
+    ny_ctc_claimed_additional_credits: 1_000 
+    # >0 then agi_with_exclusion_amount = 300_700 > threshold = 200_000
+    foreign_earned_income_exclusion: 500
+    puerto_rico_income: 200
+    filing_status: SINGLE
+    state_code: NY
+  output:
+    ny_ctc_pre_reduction_base_credit: 0
+    # base = 3 * 1_000 = 3_000
+    # rounded_reduced_agi_multiple = (300700-200000)/1000 = 100
+    # rounded_reduced_agi_amount = 100*1000 = 100,000
+    # subtraction_amount = 100,000 * 0.05 = 5000
+
+- name: NY CTC pre reduction base credit if claimed additional credit with deduction
+  period: 2021
+  input:
+    ctc_qualifying_children: 3
+    adjusted_gross_income: 210_000
+    ny_ctc_claimed_additional_credits: 1_000 
+    # >0 then agi_with_exclusion_amount = 210_700 > threshold = 200_000
+    foreign_earned_income_exclusion: 500
+    puerto_rico_income: 200
+    filing_status: SINGLE
+    state_code: NY
+  output:
+    ny_ctc_pre_reduction_base_credit: 2_450
+    # base = 3 * 1_000 = 3_000
+    # rounded_reduced_agi_multiple = 210700-200000/1000 = 11
+    # rounded_reduced_agi_amount = 11*1000 = 11,000
+    # subtraction_amount = 11,000 * 0.05 = 550
+
+- name: NY CTC pre reduction base credit if not claimed additional credit and no reduction
+  period: 2021
+  input:
+    ctc_qualifying_children: 3
+    adjusted_gross_income: 100_000
+    ny_ctc_claimed_additional_credits: 0 
+    foreign_earned_income_exclusion: 500
+    puerto_rico_income: 200
+    filing_status: SINGLE
+    state_code: NY
+  output:
+    ny_ctc_pre_reduction_base_credit: 3_000
+    # base = 3 * 1_000 = 3_000
+    # agi_with_exclusion_amount = fagi = 100000
+
+- name: NY CTC pre reduction base credit if not claimed additional credit with reduction
+  period: 2021
+  input:
+    ctc_qualifying_children: 3
+    adjusted_gross_income: 250_000
+    ny_ctc_claimed_additional_credits: 0 
+    foreign_earned_income_exclusion: 500
+    puerto_rico_income: 200
+    filing_status: SINGLE
+    state_code: NY
+  output:
+    ny_ctc_pre_reduction_base_credit: 500
+    # base = 3 * 1_000 = 3_000
+    # agi_with_exclusion_amount = fagi = 250000
+    # rounded_reduced_agi_multiple = 50
+
+- name: NY CTC pre reduction base credit if claimed additional credit for other filing status
+  period: 2021
+  input:
+    ctc_qualifying_children: 3
+    adjusted_gross_income: 300_000
+    ny_ctc_claimed_additional_credits: 1_000 
+    # >0 then agi_with_exclusion_amount = 300_700 < threshold = 400_000
+    foreign_earned_income_exclusion: 500
+    puerto_rico_income: 200
+    filing_status: JOINT
+    state_code: NY
+  output:
+    ny_ctc_pre_reduction_base_credit: 3000
+    # base = 3 * 1_000 = 3_000

policyengine_us/variables/gov/states/ny/tax/income/credits/ctc/additional_credit/ny_ctc_additional_credit.py

@@ -0,0 +1,79 @@
+from policyengine_us.model_api import *
+
+
+class ny_ctc_additional_credit(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "New York CTC additional credit"
+    documentation = "New York's Empire State Child Credit Worksheet C"
+    unit = USD
+    definition_period = YEAR
+    reference = "https://www.tax.ny.gov/pdf/2021/inc/it213i_2021.pdf#page=5"
+    defined_for = "ny_ctc_additional_credit_eligible"
+
+    def formula(tax_unit, period, parameters):
+        pre_reduction_base_credit = tax_unit(
+            "ny_ctc_pre_reduction_base_credit", period
+        )
+        base_credit = tax_unit("ny_ctc_base_credit", period)
+        # Line 3
+        reduced_base_credit = pre_reduction_base_credit - base_credit
+        # Line 4
+        earned_income = tax_unit("tax_unit_earned_income", period)
+        if period.start.year >= 2018:
+            instant_str = f"2017-01-01"
+        else:
+            instant_str = period
+        p_gov = parameters(instant_str).gov.irs.credits.ctc.refundable.phase_in
+        earned_income_over_threshold = earned_income > p_gov.threshold
+        # Line 5
+        reduced_earned_income = where(
+            earned_income_over_threshold, earned_income - p_gov.threshold, 0
+        )
+        # Line 6
+        earned_income_fraction = reduced_earned_income * p.match
+        # Line 7
+        qualifying_children = tax_unit("ctc_qualifying_children", period)
+        children_over_threshold = (
+            qualifying_children > p_gov.min_children_for_ss_taxes_minus_eitc
+        )
+        smaller_of_earned_income_or_reduced_base = min_(
+            reduced_base_credit, earned_income_fraction
+        )
+        # Calculation from federal schedule 8812 line 25
+        SS_ADD_VARIABLES = [
+            # Person:
+            "employee_social_security_tax",
+            "employee_medicare_tax",
+            "unreported_payroll_tax",
+            # Tax unit:
+            "self_employment_tax_ald",
+            "additional_medicare_tax",
+        ]
+        SS_SUBTRACT_VARIABLES = ["excess_payroll_tax_withheld"]
+        social_security_tax = add(tax_unit, period, SS_ADD_VARIABLES) - add(
+            tax_unit, period, SS_SUBTRACT_VARIABLES
+        )
+        eitc = tax_unit("eitc", period)
+        social_security_excess = max_(0, social_security_tax - eitc)
+        # Line 8
+        larger_of_ss_excess_or_earned_income = max_(
+            social_security_excess, earned_income_fraction
+        )
+        # Line 9
+        smaller_of_base_credit_or_larger_of_ss_excess_or_earned_income = min_(
+            reduced_base_credit, larger_of_ss_excess_or_earned_income
+        )
+        base_credit_over_earned_income_fraction = (
+            reduced_base_credit > earned_income_fraction
+        )
+        equal_or_more_than_three_children_calc = where(
+            base_credit_over_earned_income_fraction,
+            smaller_of_base_credit_or_larger_of_ss_excess_or_earned_income,
+            reduced_base_credit,
+        )
+        return where(
+            children_over_threshold,
+            equal_or_more_than_three_children_calc,
+            smaller_of_earned_income_or_reduced_base,
+        )

policyengine_us/variables/gov/states/ny/tax/income/credits/ctc/additional_credit/ny_ctc_additional_credit_eligible.py

@@ -0,0 +1,17 @@
+from policyengine_us.model_api import *
+
+
+class ny_ctc_additional_credit_eligible(Variable):
+    value_type = bool
+    entity = TaxUnit
+    label = "Eligible for the NY CTC additional credit"
+    definition_period = YEAR
+    reference = "https://www.tax.ny.gov/pdf/2021/inc/it213i_2021.pdf#page=5"
+    defined_for = StateCode.NY
+
+    def formula(tax_unit, period, parameters):
+        pre_reduction_base_credit = tax_unit(
+            "ny_ctc_pre_reduction_base_credit", period
+        )
+        base_credit = tax_unit("ny_ctc_base_credit", period)
+        return pre_reduction_base_credit > base_credit

policyengine_us/variables/gov/states/ny/tax/income/credits/ctc/base_credit/ny_ctc_base_credit.py

@@ -0,0 +1,31 @@
+from policyengine_us.model_api import *
+
+
+class ny_ctc_base_credit(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "The base NY CTC credit before reduction"
+    documentation = (
+        "New York's Empire State Child Credit Worksheet A / B Part 2"
+    )
+    unit = USD
+    definition_period = YEAR
+    reference = "https://www.tax.ny.gov/pdf/2021/inc/it213i_2021.pdf"
+    defined_for = StateCode.NY
+
+    def formula(tax_unit, period, parameters):
+        income_tax = tax_unit("income_tax", period)
+        # Line 19 and 19a from Form IT-201 - these are the same in our model
+        selected_credit_amount = tax_unit("ny_ctc_federal_credits", period)
+        # If the filer claimed additional credit, the base credit is reduced by the amount of the selected credits
+        # We currently skip this caluclation as we only compute the residential energy credit
+        reduced_tax = max_(0, income_tax - selected_credit_amount)
+        pre_reduction_base_credit = tax_unit(
+            "ny_ctc_pre_reduction_base_credit", period
+        )
+        base_credit_over_reduced_tax = pre_reduction_base_credit > reduced_tax
+        return where(
+            base_credit_over_reduced_tax,
+            reduced_tax,
+            pre_reduction_base_credit,
+        )

policyengine_us/variables/gov/states/ny/tax/income/credits/ctc/base_credit/ny_ctc_claimed_additional_credits.py

@@ -0,0 +1,19 @@
+from policyengine_us.model_api import *
+
+
+class ny_ctc_claimed_additional_credits(Variable):
+    value_type = bool
+    entity = TaxUnit
+    label = "Claimed additional credits applicable for the NY CTC Worksheet B"
+    definition_period = YEAR
+    documentation = "Filers in New York are requirede to file the Worksheet B for Form IT-213, Line 6 if they claimed any of the following federal tax credits: adoption credit, mortgage interest credit, carryforward of District of Columbia firsttime homebuyer credit, or residential energy efficient property credit; or excluded income from Puerto Rico; or filed federal Form 2555 or Form 4563."
+    reference = "https://www.tax.ny.gov/pdf/2021/inc/it213i_2021.pdf#page=3"
+    defined_for = StateCode.NY
+
+    def formula(tax_unit, period, parameters):
+        # We currently do not include the adoption credit, mortgage interest credit,
+        # carryforward of District of Columbia first time homebuyer credit
+        applicable_credits = tax_unit(
+            "residential_clean_energy_credit", period
+        )
+        return applicable_credits > 0

policyengine_us/variables/gov/states/ny/tax/income/credits/ctc/base_credit/ny_ctc_federal_credits.py

@@ -0,0 +1,29 @@
+from policyengine_us.model_api import *
+
+
+class ny_ctc_federal_credits(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "NY Worksheet A/B for Form IT-213 federal credit computation"
+    documentation = "New York's Empire State Child Credit Worksheet A and B"
+    unit = USD
+    definition_period = YEAR
+    reference = "https://www.tax.ny.gov/pdf/2021/inc/it213i_2021.pdf#page=2"
+    defined_for = StateCode.NY
+
+    # Line 8 of Worksheet A, Line 10 of worksheet B
+    adds = [
+        # a: Form 1040, Schedule 3, line 1, Foreign tax credit
+        "foreign_tax_credit",
+        # b: Form 1040, Schedule 3, line 2, Credit for child and dependent care expenses
+        "cdcc",
+        # c Form 1040, Schedule 3, line 3, Education credits
+        "education_tax_credits",
+        # d Form 1040, Schedule 3, line 4, Retirement savings contributions credit
+        "savers_credit",
+        # e Form 1040, Schedule 3, line 6l, Total increase/decrease to reporting year tax
+        # f Form 8910, Alternative Motor Vehicle Credit
+        # g Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit, line 23
+        # h Schedule R, Credit for the Elderly or the Disabled, line 22
+        "elderly_disabled_credit",
+    ]