NY Empire State child credit 2018–2022: children under 4 are left out of Worksheet A instead of prorated #10506

Problem

For 2018–2022 (minimum_age = 4), ny_ctc_pre_2024 computes the pre-TCJA federal CTC with only children aged 4 and over:

meets_ny_minimum_age = age >= p.minimum_age
pre_tcja_ctc.set_input(
    "ctc_individual_maximum",
    period,
    maximum_ctc * meets_ny_minimum_age,
)

Form IT-213 does it differently in every year from 2018 to 2022:

1. Worksheet A starts from all children on line 4, including children under 4.
2. The phase-out and the federal tax limit apply to that total.
3. Lines 9–12 prorate the result to the children aged 4–16 (line 5).
4. Line 13 multiplies by 33%.

The two methods give different results when the phase-out or the tax limit reduces Worksheet A.

Example

New York resident, head of household, $85,000 of wages, children aged 2 and 10. PE-US main 2.72.3 (4c65c82).

Form calculation (2022 line numbers; 2021 uses the same numbers):

• Form line 4 = 2. Line 5 = 1.
• Worksheet A line 1 = 2 × $1,000 = 2,000.
• Line 2 (NY recomputed FAGI) = 85,000. Line 3 = 75,000. Line 4 = 10,000. Line 5 = 500. Line 6 = 1,500.
• Line 7 (federal tax) = 8,549. Line 8 = 0 (no Schedule 3 credits). Line 9 = 8,549.
• Line 10: line 6 is not more than line 9, so 1,500 goes to form line 6. Worksheet C is not needed, so form line 7 = 0.
• Form line 8 = 1,500. Line 10 = 1,500 ÷ 2 = 750. Line 12 = 750 × 1 = 750. Line 13 = 247.50.
• Line 3 is "No", so line 16 = 247.50.

PE gives 33% × (1,000 − 500) = 165.00, because it removes the 2-year-old before the phase-out. If minimum_age is set to 0, PE gives 495.00 (33% × 1,500); the form value is that amount × ½.

Controls where PE and the form agree:

• 10-year-old only, $85,000: 165.00.
• Children aged 2 and 10, $50,000 (below the threshold): 330.00.

Sources

2022 Instructions for Form IT-213, PDF page 2, "Line 4": "Enter the number of children who qualify for the federal child tax credit or additional child tax credit, and any child who was less than 17 years old on December 31, who qualifies for the federal credit for other dependents, whether you claimed the credit on your federal return"

2022 Instructions for Form IT-213, PDF page 3, Worksheet A: "1. Multiply the number of children from Form IT-213, line 4 by $1,000 and enter the result." … "4. … Subtract line 3 from line 2. If the result is not a multiple of $1,000, increase it to the next multiple of $1,000." "5. Multiply the amount on line 4 by 5% (.05)." "6. … Subtract line 5 from line 1." "7. Enter your 2022 federal tax (Form 1040 or Form 1040NR, line 18)." … "10. Is the amount on line 6 more than the amount on line 9? … No. Enter the amount from line 6 here and on Form IT-213, line 6. If you answered Yes on line 9 or 10 above, complete Worksheet C"

2022 Form IT-213, PDF page 1: "5 Enter the number of children from line 4 that were at least four but less than 17 years of age on December 31"

2022 Form IT-213, PDF page 2: "8 Add lines 6 and 7." "9 Enter the number of children from line 4" "10 Divide line 8 by line 9" "11 Enter the number of children from line 5" "12 Multiply line 10 by line 11" "13 Multiply line 12 by 33% (.33)" "If you marked the No box on line 3, skip lines 14 and 15, and enter the amount from line 13 on line 16." "16 Empire State child credit (enter the amount from line 13 or line 15, whichever is greater)"

2018, 2019, 2020 and 2021 Forms IT-213 (2018, 2019, 2020, 2021) have the same lines 5 and 9–13. Each year's instructions start Worksheet A with "1 Multiply the number of children from Form IT-213, line 4 by $1,000 and enter the result here".

NY Tax Law §606(c-1)(1) (current text): "the applicable percentage of the child tax credit allowed the taxpayer under section twenty-four of the internal revenue code for the same taxable year for each qualifying child."

Suggested fix

For years when minimum_age is 4:

1. Compute the pinned pre-TCJA credit with all qualifying children, with no age mask.
2. Multiply the result by (children aged 4–16) ÷ (all children on line 4).

The $100 minimum already uses only the children aged 4 and over.

Notes

• No existing test covers mixed ages before 2023. The 2022 test where a 3-year-old alone gets 0 must still pass, because form line 5 = 0 stops the form.
• The 2021 line 4 instructions say "less than 18 years old" for children who qualify for the credit for other dependents, so a 17-year-old also needs a check.
• Related: Update New York CTC #6113 (added the age mask), Fix NY CTC (pre 2025) Calculation #6510 (tax-liability limit), Count CTC-qualifying children only when the filer meets the identification requirements #10280 (open; changes ctc_qualifying_child, which this formula reads).