PolicyEngine · MaxGhenis · Jul 22, 2024 · Jun 17, 2024 · Jun 18, 2024 · Jun 18, 2024
diff --git a/changelog_entry.yaml b/changelog_entry.yaml
@@ -0,0 +1,4 @@
+- bump: patch
+  changes:
+    added:
+    - Refactor social security taxes for refundable CTC calculation.
diff --git a/policyengine_us/parameters/gov/irs/credits/ctc/refundable/ss/add.yaml b/policyengine_us/parameters/gov/irs/credits/ctc/refundable/ss/add.yaml
@@ -0,0 +1,16 @@
+description: The IRS defines social security taxes under the Child Tax Credit to include the following variables.
+values:
+  2018-01-01:
+    # Person:
+    - employee_social_security_tax
+    - employee_medicare_tax
+    - unreported_payroll_tax
+    # Tax Unit:
+    - self_employment_tax_ald
+    - additional_medicare_tax
+metadata:
+  unit: program
+  label: Variables added for Social Security taxes in Child Tax Credit calculation
+  reference:
+    - title: 26 U.S. Code § 24(d)(2)(A)
+      href: https://www.law.cornell.edu/uscode/text/26/24#d_2_A
diff --git a/policyengine_us/parameters/gov/irs/credits/ctc/refundable/ss/subtract.yaml b/policyengine_us/parameters/gov/irs/credits/ctc/refundable/ss/subtract.yaml
@@ -0,0 +1,10 @@
+description: The IRS defines social security taxes under the Child Tax Credit to exclude the following variables.
+values:
+  2018-01-01:
+    - excess_payroll_tax_withheld
+metadata:
+  unit: program
+  label: Variables subtracted for Social Security taxes in Child Tax Credit calculation
+  reference:
+    - title: 26 U.S. Code § 24(d)(2)(B)
+      href: https://www.law.cornell.edu/uscode/text/26/24#d_2_B
diff --git a/...gine_us/tests/policy/baseline/gov/irs/credits/ctc/refundable/ctc_social_security_tax.yaml b/...gine_us/tests/policy/baseline/gov/irs/credits/ctc/refundable/ctc_social_security_tax.yaml
@@ -0,0 +1,41 @@
+- name: No inputs
+  period: 2018
+  input:
+    # SS_ADD_VARIABLES
+    employee_social_security_tax: 0
+    employee_medicare_tax: 0
+    unreported_payroll_tax: 0
+    self_employment_tax_ald: 0
+    additional_medicare_tax: 0
+    # SS_SUBTRACT_VARIABLES
+    excess_payroll_tax_withheld: 0
+  output:
+    ctc_social_security_tax: 0
+
+- name: Social security taxes included variables more than excluded variables
+  period: 2018
+  input:
+    # SS_ADD_VARIABLES
+    employee_social_security_tax: 100
+    employee_medicare_tax: 100
+    unreported_payroll_tax: 0
+    self_employment_tax_ald: 50
+    additional_medicare_tax: 25
+    # SS_SUBTRACT_VARIABLES
+    excess_payroll_tax_withheld: 200
+  output:
+    ctc_social_security_tax: 75
+
+- name: Social security taxes included variables less than excluded variables
+  period: 2018
+  input:
+    # SS_ADD_VARIABLES
+    employee_social_security_tax: 100
+    employee_medicare_tax: 100
+    unreported_payroll_tax: 0
+    self_employment_tax_ald: 50
+    additional_medicare_tax: 25
+    # SS_SUBTRACT_VARIABLES
+    excess_payroll_tax_withheld: 450
+  output:
+    ctc_social_security_tax: -175
diff --git a/...s/policy/baseline/gov/states/co/tax/income/credits/ctc/federal_ctc/co_refundable_ctc.yaml b/...s/policy/baseline/gov/states/co/tax/income/credits/ctc/federal_ctc/co_refundable_ctc.yaml
@@ -6,14 +6,7 @@
     co_federal_ctc_maximum: 0
     co_ctc_eligible_children_count: 0
     tax_unit_earned_income: 0
-    # SS_ADD_VARIABLES
-    employee_social_security_tax: 0
-    employee_medicare_tax: 0
-    unreported_payroll_tax: 0
-    self_employment_tax_ald: 0
-    additional_medicare_tax: 0
-    # SS_SUBTRACT_VARIABLES
-    excess_payroll_tax_withheld: 0
+    ctc_social_security_tax: 0
     eitc: 0
   output:
     co_refundable_ctc: 0
@@ -26,14 +19,7 @@
     co_federal_ctc_maximum: 2_000
     co_ctc_eligible_children_count: 3
     tax_unit_earned_income: 0
-    # SS_ADD_VARIABLES
-    employee_social_security_tax: 0
-    employee_medicare_tax: 0
-    unreported_payroll_tax: 0
-    self_employment_tax_ald: 0
-    additional_medicare_tax: 0
-    # SS_SUBTRACT_VARIABLES
-    excess_payroll_tax_withheld: 0
+    ctc_social_security_tax: 0
     eitc: 0
   output:
     co_refundable_ctc: 0
@@ -46,14 +32,7 @@
     co_federal_ctc_maximum: 2_000
     co_ctc_eligible_children_count: 1
     tax_unit_earned_income: 100_000
-    # SS_ADD_VARIABLES
-    employee_social_security_tax: 0
-    employee_medicare_tax: 0
-    unreported_payroll_tax: 0
-    self_employment_tax_ald: 0
-    additional_medicare_tax: 0
-    # SS_SUBTRACT_VARIABLES
-    excess_payroll_tax_withheld: 0
+    ctc_social_security_tax: 0
     eitc: 0
   output:
     co_refundable_ctc: 1_500
@@ -66,14 +45,7 @@
     co_federal_ctc_maximum: 2_000
     co_ctc_eligible_children_count: 2
     tax_unit_earned_income: 100_000
-    # SS_ADD_VARIABLES
-    employee_social_security_tax: 0
-    employee_medicare_tax: 0
-    unreported_payroll_tax: 0
-    self_employment_tax_ald: 0
-    additional_medicare_tax: 0
-    # SS_SUBTRACT_VARIABLES
-    excess_payroll_tax_withheld: 0
+    ctc_social_security_tax: 0
     eitc: 0
   output:
     co_refundable_ctc: 3_000
@@ -86,14 +58,7 @@
     co_federal_ctc_maximum: 2_000
     co_ctc_eligible_children_count: 2
     tax_unit_earned_income: 100_000
-    # SS_ADD_VARIABLES
-    employee_social_security_tax: 0
-    employee_medicare_tax: 0
-    unreported_payroll_tax: 0
-    self_employment_tax_ald: 0
-    additional_medicare_tax: 0
-    # SS_SUBTRACT_VARIABLES
-    excess_payroll_tax_withheld: 0
+    ctc_social_security_tax: 0
     eitc: 0
   output:
     co_refundable_ctc: 2_000
@@ -106,14 +71,7 @@
     co_federal_ctc_maximum: 2_000
     co_ctc_eligible_children_count: 1
     tax_unit_earned_income: 10_000
-    # SS_ADD_VARIABLES
-    employee_social_security_tax: 0
-    employee_medicare_tax: 0
-    unreported_payroll_tax: 0
-    self_employment_tax_ald: 0
-    additional_medicare_tax: 0
-    # SS_SUBTRACT_VARIABLES
-    excess_payroll_tax_withheld: 0
+    ctc_social_security_tax: 0
     eitc: 0
   output:
     co_refundable_ctc: 1_125
@@ -126,14 +84,7 @@
     co_federal_ctc_maximum: 2_000
     co_ctc_eligible_children_count: 3
     tax_unit_earned_income: 100_000
-    # SS_ADD_VARIABLES
-    employee_social_security_tax: 1_000
-    employee_medicare_tax: 2_000
-    unreported_payroll_tax: 0
-    self_employment_tax_ald: 0
-    additional_medicare_tax: 0
-    # SS_SUBTRACT_VARIABLES
-    excess_payroll_tax_withheld: 500
+    ctc_social_security_tax: 2_500
     eitc: 0
   output:
     co_refundable_ctc: 4_500
@@ -146,14 +97,7 @@
     co_federal_ctc_maximum: 2_000
     co_ctc_eligible_children_count: 3
     tax_unit_earned_income: 100_000
-    # SS_ADD_VARIABLES
-    employee_social_security_tax: 1_000
-    employee_medicare_tax: 2_000
-    unreported_payroll_tax: 0
-    self_employment_tax_ald: 0
-    additional_medicare_tax: 0
-    # SS_SUBTRACT_VARIABLES
-    excess_payroll_tax_withheld: 500
+    ctc_social_security_tax: 2_500
     eitc: 0
   output:
     co_refundable_ctc: 2_000
@@ -166,14 +110,7 @@
     co_federal_ctc_maximum: 2_000
     co_ctc_eligible_children_count: 3
     tax_unit_earned_income: 10_000
-    # SS_ADD_VARIABLES
-    employee_social_security_tax: 0
-    employee_medicare_tax: 0
-    unreported_payroll_tax: 1_000
-    self_employment_tax_ald: 0
-    additional_medicare_tax: 3_000
-    # SS_SUBTRACT_VARIABLES
-    excess_payroll_tax_withheld: 500
+    ctc_social_security_tax: 3_500
     eitc: 0
   output:
     co_refundable_ctc: 3_500
@@ -186,14 +123,7 @@
     co_federal_ctc_maximum: 2_000
     co_ctc_eligible_children_count: 7
     tax_unit_earned_income: 8_000
-    # SS_ADD_VARIABLES
-    employee_social_security_tax: 1_000
-    employee_medicare_tax: 10_000
-    unreported_payroll_tax: 0
-    self_employment_tax_ald: 0
-    additional_medicare_tax: 0
-    # SS_SUBTRACT_VARIABLES
-    excess_payroll_tax_withheld: 500
+    ctc_social_security_tax: 10_500
     eitc: 1_000
   output:
     co_refundable_ctc: 9_500
diff --git a/policyengine_us/variables/gov/irs/credits/ctc/refundable/ctc_social_security_tax.py b/policyengine_us/variables/gov/irs/credits/ctc/refundable/ctc_social_security_tax.py
@@ -0,0 +1,16 @@
+from policyengine_us.model_api import *
+
+
+class ctc_social_security_tax(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "Refundable Child Tax Credit Social Security Tax"
+    unit = USD
+    documentation = (
+        "Social Security taxes considered in the Child Tax Credit calculation"
+    )
+    definition_period = YEAR
+    reference = "https://www.law.cornell.edu/uscode/text/26/24#d_2"
+
+    adds = "gov.irs.credits.ctc.refundable.ss.add"
+    subtracts = "gov.irs.credits.ctc.refundable.ss.subtract"
diff --git a/policyengine_us/variables/gov/irs/credits/ctc/refundable/refundable_ctc.py b/policyengine_us/variables/gov/irs/credits/ctc/refundable/refundable_ctc.py
@@ -43,23 +43,7 @@ def formula(tax_unit, period, parameters):
         relevant_earnings = (
             earnings_over_threshold * ctc.refundable.phase_in.rate
         )
-
-        # Compute "Social Security taxes" as defined in the US Code for the ACTC.
-        # This includes OASDI and Medicare payroll taxes, as well as half
-        # of self-employment taxes.
-        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
-        )
+        social_security_tax = tax_unit("ctc_social_security_tax", period)
         eitc = tax_unit("eitc", period)
         social_security_excess = max_(0, social_security_tax - eitc)
         qualifying_children = tax_unit("ctc_qualifying_children", period)

diff --git a/...engine_us/variables/gov/states/co/tax/income/credits/ctc/federal_ctc/co_refundable_ctc.py b/...engine_us/variables/gov/states/co/tax/income/credits/ctc/federal_ctc/co_refundable_ctc.py
@@ -40,18 +40,8 @@ def formula(tax_unit, period, parameters):
         relevant_earnings = (
             earnings_over_threshold * p.refundable.phase_in.rate
         )  # Line 13
-        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
+        social_security_tax = tax_unit(
+            "ctc_social_security_tax", period
         )  # Line 14 - 16
         federal_eitc = tax_unit("eitc", period)  # Line 17a
         social_security_excess = max_(