Apply Iowa, Kansas, Louisiana and Maryland rules for a filer who can be claimed as a dependent

changelog.d/claimable-filer-ia-ks-ky-la-md.fixed.md

@@ -0,0 +1 @@
+Apply Iowa, Kansas, Louisiana and Maryland rules for a filer who can be claimed as a dependent: no dependent exemptions or credits on a return with a claimable filer outside the claimant filing exception (Iowa dependent credit, Kansas dependent exemption and food sales tax credit child, Louisiana dependent exemption, Maryland dependent and aged-dependent exemptions and child tax credit). Iowa withholds the low-income exemption, the single-filer tax reduction and the alternate tax from a claimed dependent only when the claiming person's net income exceeds the Iowa Code 422.5 limit, using new claimant income and filing status inputs. Kansas counts each filer whom no one else may claim, plus allowable dependents, for its 2021-2023 exemptions, and each such filer plus dependent children under 18 for its food sales tax credit. Kansas also gives a 2021-2023 head of household one filer exemption rather than two, since K.S.A. 79-32,121 limited the extra allowance to tax year 1998. Maryland keeps every filer's own exemption under Tax-General 10-211(a)(1), including a filer who can be claimed. Its poverty line credit excludes only a filer actually claimed as an exemption on another Maryland return, through a new input that defaults to the federal claim, and keeps ordinary earned income; a Maryland filer who can be claimed gets no childless EITC. Also limit Maryland's aged dependent exemption by federal AGI under Tax-General 10-211(c), as for the personal exemption.

policyengine_us/parameters/gov/states/ks/tax/income/credits/food_sales_tax/amount.yaml

@@ -1,4 +1,4 @@
-description: Kansas provides a food sales tax credit of this amount per qualifying exemption.
+description: Kansas provides a food sales tax credit of this amount per exemption claimed on the federal return.
 values:
   2015-01-01: 125
   2025-01-01: 0
@@ -16,5 +16,7 @@ metadata:
     href: https://www.ksrevenue.gov/pdf/ip24.pdf#page=5
   - title: HB 2106 (2022) - Food sales tax phase-out
     href: https://kslegislature.gov/li_2022/b2021_22/measures/hb2106/
+  - title: 2022 HB 2106, section 4, amending K.S.A. 79-32,271
+    href: https://kslegislature.gov/li_2022/b2021_22/measures/documents/hb2106_enrolled.pdf#page=2
   - title: Kansas 2022 Statute Article 32 79-32,271(d)
     href: https://kslegislature.gov/b2023_24/laws/079_000_0000_chapter/079_032_0000_article/079_032_0271_section/079_032_0271_k/

policyengine_us/parameters/gov/states/ks/tax/income/exemptions/consolidated/amount.yaml

@@ -1,4 +1,4 @@
-description: Kansas provides this exemption for each person in a filing unit, pre 2024.
+description: Kansas provides this exemption for each federal exemption to which a filer is entitled, before 2024.
 values:
   2021-01-01: 2_250
 
@@ -22,3 +22,7 @@ metadata:
   # Legal code represents post 2024 structure
   - title: Kan. Stat. § 79-32,121 (a) 
     href: https://ksrevisor.gov/statutes/chapters/ch79/079_032_0121.html
+  - title: K.S.A. 79-32,121(a), 2023 statutory edition
+    href: https://kslegislature.gov/li_2024s/b2023_24/statute/079_000_0000_chapter/079_032_0000_article/079_032_0121_section/079_032_0121_k/
+  - title: 2022 HB 2239, section 40, reenacting K.S.A. 79-32,121(a)
+    href: https://www.kslegislature.gov/li_2022/b2021_22/measures/documents/hb2239_enrolled.pdf#page=38

policyengine_us/reforms/state_dependent_exemptions/repeal_state_dependent_exemptions.py

@@ -367,11 +367,9 @@ def formula(tax_unit, period, parameters):
                     head_of_household * p.by_filing_status.hoh_additional_amount
                 )
                 return base_amount + veterans_exemption_amount + hoh_additional
-            filing_status = tax_unit("filing_status", period)
-            statuses = filing_status.possible_values
-            joint = filing_status == statuses.JOINT
-            hoh = filing_status == statuses.HEAD_OF_HOUSEHOLD
-            adults = where(joint | hoh, 2, 1)
+            # K.S.A. 79-32,121(a) with IRC 151(d)(2): each filer whom no one
+            # else may claim keeps an exemption, as in ks_count_exemptions.
+            adults = tax_unit("head_spouse_count_not_dependent_elsewhere", period)
             return adults * p.consolidated.amount + veterans_exemption_amount
 
     class ma_income_tax_exemption_threshold(Variable):

policyengine_us/reforms/states/ia/dependent_credit/ia_dependent_credit_reform.py

@@ -38,7 +38,12 @@ def formula(tax_unit, period, parameters):
             # dependent is age-eligible, matching the baseline count.
             person = tax_unit.members
             age = person("age", period)
-            is_dependent = person("is_tax_unit_dependent", period)
+            # A return on which the filer (or, if joint, either spouse) can be
+            # claimed as a dependent has no dependents (IRC 152(b)(1)), unless
+            # the would-be claimant meets the filing exception (Publication 501).
+            is_dependent = person("is_tax_unit_dependent", period) & ~person.tax_unit(
+                "head_or_spouse_is_dependent_elsewhere_without_filing_exception", period
+            )
             if c.age_limit.in_effect:
                 eligible = is_dependent & (age < c.age_limit.threshold)
             else:

policyengine_us/reforms/states/ks/dependent_exemption/ks_dependent_exemption_reform.py

@@ -15,6 +15,12 @@ def formula(tax_unit, period, parameters):
 
             person = tax_unit.members
             age = person("age", period)
+            # A return on which the filer (or, if joint, either spouse) can be
+            # claimed as a dependent has no dependents (IRC 152(b)(1)), unless
+            # the would-be claimant meets the filing exception (Publication 501).
+            no_dependents = tax_unit(
+                "head_or_spouse_is_dependent_elsewhere_without_filing_exception", period
+            )
             is_dependent = person("is_tax_unit_dependent", period)
 
             # Apply age limit if in effect.
@@ -24,7 +30,7 @@ def formula(tax_unit, period, parameters):
             else:
                 eligible_dependents = is_dependent
 
-            return tax_unit.sum(eligible_dependents)
+            return where(no_dependents, 0, tax_unit.sum(eligible_dependents))
 
     class ks_dependent_exemption(Variable):
         value_type = float

policyengine_us/reforms/states/md/dependent_exemption/md_dependent_exemption_reform.py

@@ -14,7 +14,12 @@ def formula(tax_unit, period, parameters):
             p = parameters(period).gov.contrib.states.md.dependent_exemption
             person = tax_unit.members
             age = person("age", period)
-            is_dependent = person("is_tax_unit_dependent", period)
+            # A return on which the filer (or, if joint, either spouse) can be
+            # claimed as a dependent has no dependents (IRC 152(b)(1)), unless
+            # the would-be claimant meets the filing exception (Publication 501).
+            is_dependent = person("is_tax_unit_dependent", period) & ~person.tax_unit(
+                "head_or_spouse_is_dependent_elsewhere_without_filing_exception", period
+            )
             if p.age_limit.in_effect:
                 eligible = is_dependent & (age < p.age_limit.threshold)
             else:
@@ -97,7 +102,12 @@ class md_older_dependents_count(Variable):
 
         def formula(tax_unit, period, parameters):
             person = tax_unit.members
-            is_dependent = person("is_tax_unit_dependent", period)
+            # A return on which the filer (or, if joint, either spouse) can be
+            # claimed as a dependent has no dependents (IRC 152(b)(1)), unless
+            # the would-be claimant meets the filing exception (Publication 501).
+            is_dependent = person("is_tax_unit_dependent", period) & ~person.tax_unit(
+                "head_or_spouse_is_dependent_elsewhere_without_filing_exception", period
+            )
             total_dependents = tax_unit.sum(is_dependent)
             eligible = tax_unit("md_eligible_dependents_count", period)
             return max_(0, total_dependents - eligible)

policyengine_us/tests/core/test_claimable_filer_ia_ks_ky_la_md_invariants.py

@@ -0,0 +1,248 @@
+"""Iowa, Kansas, Kentucky, Louisiana and Maryland rules for a filer who can be
+claimed as a dependent.
+
+A return on which the filer (or, if joint, either spouse) can be claimed has no
+dependents unless the would-be claimant meets the filing exception (IRC
+152(b)(1), Publication 501), so these states' dependent exemptions and credits,
+Kansas's food sales tax credit child route, Maryland's child tax credit and the
+childless pro forma EITC follow that test. Kansas's 2021-2023 exemptions and
+its food sales tax credit count each filer whom no one else may claim (IRC
+151(d)(2)). Iowa's low-income exemption, tax reduction and alternate tax turn on
+an actual claim and the claiming person's income, whose inputs default to no
+disqualification; Maryland's poverty line credit turns on an actual claim on
+another Maryland return, a separate input that defaults to the federal claim;
+every Maryland filer keeps their own exemption (Tax-General 10-211(a)(1)).
+
+For couples drawn by Hypothesis (claimable, claimed and filing-exception
+patterns) and a seeded population in these states:
+
+1. Swap invariance: each output is the same under either head/spouse
+   labelling.
+2. Monotonicity: marking another filer as claimed never raises the amounts in
+   MONOTONE. This holds for the drawn inputs, which have no self-employment
+   losses: on separate Maryland returns a claimable spouse's loss no longer
+   offsets the other spouse's earnings, which is intended.
+3. Identities: with a filer claimable outside the filing exception there is no
+   Louisiana dependent exemption, Maryland aged dependent exemption or child
+   tax credit, and no pro forma federal EITC without a child. Every filer
+   keeps a Maryland exemption, so Maryland's count covers both spouses and
+   the poverty line credit's poverty level is positive.
+4. Differential: wherever the federal EITC's eligibility holds, Maryland's
+   pro forma federal EITC without the minimum age equals the federal credit
+   before take-up and filing.
+5. Unchanged when nobody can be claimed: Maryland's exemption count is the tax
+   unit's size, the poverty line credit's poverty level is `tax_unit_fpg`, and
+   Louisiana's dependent exemption is $1,000 per dependent.
+6. Filing exception scope: the exception never lowers the 152(b)(1) amounts in
+   EXCEPTION_RESTORES and does not change the claimability and actual-claim
+   rules in EXCEPTION_NEUTRAL.
+"""
+
+import numpy as np
+import pytest
+from hypothesis import HealthCheck, given, settings
+from hypothesis import strategies as st
+
+from policyengine_us import Simulation
+from policyengine_us.tests.core.test_claimable_filer_federal_invariants import (
+    check_monotone,
+    check_swap,
+)
+from policyengine_us.tests.core.test_dependent_elsewhere_head_spouse_swap_invariance import (
+    CLAIM_PATTERNS,
+    TOLERANCE,
+    _calc,
+    _crafted_cases,
+    _exception_variants,
+    _seeded_couples,
+    _situation,
+    adults,
+    dependents,
+)
+
+STATES = ["IA", "KS", "KY", "LA", "MD"]
+# 2022: Iowa's net-income path, Kansas's exemption count and Louisiana's
+# exemptions; 2024: Iowa's consolidated path and Kansas's filing-status
+# allowance; 2026: Louisiana's flat tax and Maryland's child tax credit
+# phase-out.
+YEARS = [2022, 2024, 2026]
+MONOTONE = [
+    "ia_exemption_credit",
+    "ks_exemptions",
+    "ks_fstc",
+    "la_dependents_exemption",
+    "md_personal_exemptions_count",
+    "md_total_personal_exemptions",
+    "md_aged_dependent_exemption",
+    "federal_eitc_without_age_minimum",
+    "md_ctc",
+]
+OUTPUTS = MONOTONE + [
+    "ia_is_tax_exempt",
+    "ia_income_tax",
+    "ks_income_tax",
+    "ky_income_tax",
+    "la_income_tax",
+    "is_eligible_md_poverty_line_credit",
+    "md_poverty_line_credit",
+    "md_local_poverty_line_credit",
+    "md_income_tax",
+    "state_income_tax",
+]
+# 152(b)(1) amounts that the claimant filing exception restores.
+EXCEPTION_RESTORES = [
+    "ia_exemption_credit",
+    "ks_exemptions",
+    "ks_fstc",
+    "la_dependents_exemption",
+    "md_personal_exemptions_count",
+    "md_aged_dependent_exemption",
+    "federal_eitc_without_age_minimum",
+    "md_ctc",
+]
+# Rules on claimability or an actual claim, which the exception leaves alone.
+EXCEPTION_NEUTRAL = [
+    "ia_is_tax_exempt",
+]
+
+
+# Both spouses claimable outside the filing exception, with no dependents:
+# the unit that had no Maryland exemption while the model denied a claimable
+# filer's own. Every Hypothesis batch includes it, so identity 3 always sees
+# it.
+EVERY_FILER_CLAIMABLE = {
+    "state": "MD",
+    "adults": [
+        {"age": 20, "employment_income": 4_000.0},
+        {"age": 21, "employment_income": 4_000.0},
+    ],
+    "dependents": [],
+    "claimed": (False, False),
+    "claimable": (True, True),
+    "exception": (False, False),
+}
+
+
+@st.composite
+def couples(draw):
+    claimable = draw(st.sampled_from(CLAIM_PATTERNS))
+    claimed = tuple(can_claim and draw(st.booleans()) for can_claim in claimable)
+    return {
+        "state": draw(st.sampled_from(STATES)),
+        "adults": [draw(adults()), draw(adults())],
+        "dependents": draw(st.lists(dependents(), max_size=2)),
+        "claimed": claimed,
+        "claimable": claimable,
+        "exception": (draw(st.booleans()), draw(st.booleans())),
+    }
+
+
+def _identities(sim, year):
+    claimable = _calc(sim, "head_or_spouse_is_dependent_elsewhere", year) > 0
+    no_dependents = (
+        _calc(
+            sim, "head_or_spouse_is_dependent_elsewhere_without_filing_exception", year
+        )
+        > 0
+    )
+    childless = _calc(sim, "eitc_child_count", year) == 0
+    for name in ["la_dependents_exemption", "md_aged_dependent_exemption", "md_ctc"]:
+        assert not _calc(sim, name, year)[no_dependents].any(), name
+    pro_forma = _calc(sim, "federal_eitc_without_age_minimum", year)
+    assert not pro_forma[no_dependents & childless].any()
+    # Each tax unit has its own household, in the same order.
+    state = np.asarray(sim.calculate("state_code_str", year))
+    md, la = state == "MD", state == "LA"
+    # Tax-General 10-211(a)(1): every filer keeps an exemption.
+    md_count = _calc(sim, "md_personal_exemptions_count", year)
+    assert (md_count[md] >= _calc(sim, "head_spouse_count", year)[md]).all()
+    assert (_calc(sim, "md_poverty_line_credit_income_level", year)[md] > 0).all()
+    # 5. Unchanged when nobody can be claimed.
+    nobody = ~claimable
+    np.testing.assert_array_equal(
+        _calc(sim, "md_personal_exemptions_count", year)[md & nobody],
+        _calc(sim, "tax_unit_size", year)[md & nobody],
+    )
+    np.testing.assert_allclose(
+        _calc(sim, "md_poverty_line_credit_income_level", year)[md & nobody],
+        _calc(sim, "tax_unit_fpg", year)[md & nobody],
+        atol=TOLERANCE,
+    )
+    np.testing.assert_allclose(
+        _calc(sim, "la_dependents_exemption", year)[la & nobody],
+        1_000 * _calc(sim, "tax_unit_dependents", year)[la & nobody],
+        atol=TOLERANCE,
+    )
+    # 4. Differential: the federal credit before take-up and filing.
+    federal_eligible = md & (_calc(sim, "eitc_eligible", year) > 0)
+    federal = np.minimum(
+        _calc(sim, "eitc_phased_in", year),
+        np.maximum(
+            0, _calc(sim, "eitc_maximum", year) - _calc(sim, "eitc_reduction", year)
+        ),
+    )
+    np.testing.assert_allclose(
+        pro_forma[federal_eligible], federal[federal_eligible], atol=TOLERANCE
+    )
+
+
+@settings(
+    max_examples=3,
+    deadline=None,
+    derandomize=True,
+    suppress_health_check=[HealthCheck.too_slow, HealthCheck.data_too_large],
+)
+@given(st.sampled_from(YEARS), st.lists(couples(), min_size=6, max_size=12))
+def test_ia_ks_ky_la_md_claimable_filer_rules_are_label_free(year, units):
+    check_swap(units + [EVERY_FILER_CLAIMABLE], year, OUTPUTS, _identities)
+
+
+@pytest.mark.parametrize("year", YEARS)
+def test_ia_ks_ky_la_md_claimable_filer_rules_seeded_population(year):
+    units = _seeded_couples(STATES, per_state=3) + _crafted_cases(STATES)
+    # Guarantee an actual claim together with the claimant filing exception;
+    # the Kansas contrib YAML separately checks the consolidated-regime count.
+    units.append(
+        {
+            "state": "KS",
+            "adults": [
+                {"age": 20, "employment_income": 500},
+                {"age": 30, "employment_income": 500},
+            ],
+            "dependents": [{"age": 5}],
+            "claimed": (True, False),
+            "exception": (True, False),
+        }
+    )
+    check_swap(units, year, OUTPUTS, _identities)
+    check_monotone(units, year, MONOTONE, _identities)
+
+
+@pytest.mark.parametrize("year", [2022, 2025])
+def test_ia_ks_ky_la_md_filing_exception_scope(year):
+    # Each unit runs four times with nobody actually claimed: claimable
+    # without the exception (both labellings), then with it.
+    units = [
+        unit
+        for unit in _seeded_couples(STATES, per_state=3) + _crafted_cases(STATES)
+        if any(unit["claimed"])
+    ]
+    sim = Simulation(situation=_situation(units, year, _exception_variants))
+    for name in EXCEPTION_RESTORES + EXCEPTION_NEUTRAL:
+        copies = _calc(sim, name, year).reshape(-1, 4)
+        np.testing.assert_allclose(
+            copies[:, 0::2], copies[:, 1::2], atol=TOLERANCE, rtol=0
+        )
+        without, with_exception = copies[:, :2], copies[:, 2:]
+        if name in EXCEPTION_NEUTRAL:
+            np.testing.assert_allclose(
+                with_exception,
+                without,
+                atol=TOLERANCE,
+                rtol=0,
+                err_msg=f"The filing exception changes {name}",
+            )
+        else:
+            assert not (with_exception < without - TOLERANCE).any(), (
+                f"The filing exception lowers {name}"
+            )