Fix CalEITC child counts for ITIN holders

changelog.d/statute-bugs-ca-caleitc-itin-children.fixed.md

@@ -0,0 +1,3 @@
+Count qualifying children with an ITIN or SSN for California's earned income tax credit from 2020.
+
+Apply the same identification rule to the California young child tax credit: a child under 6 needs a work-valid SSN before 2020 and an SSN or ITIN from 2020.

policyengine_us/parameters/gov/states/ca/tax/income/credits/earned_income/eligibility/itin_eligible.yaml

@@ -0,0 +1,17 @@
+description: California accepts an individual taxpayer identification number, or a social security number not valid for work, for a CalEITC and young child tax credit qualifying child if this is true.
+values:
+  2015-01-01: false
+  # R&TC 17052(p), added by AB 1876, applies to taxable years beginning on or
+  # after January 1, 2020.
+  2020-01-01: true
+metadata:
+  unit: bool
+  period: year
+  label: California EITC ITIN eligibility for qualifying children
+  reference:
+    - title: California Revenue and Taxation Code § 17052(p)
+      href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=17052.
+    - title: AB 1876 (Stats. 2020, ch. 87), section 1
+      href: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1876
+    - title: 2020 FTB 3514 instructions, Step 1 and Line 7
+      href: https://www.ftb.ca.gov/forms/2020/2020-3514-instructions.html

policyengine_us/tests/policy/baseline/gov/states/ca/tax/income/credits/earned_income/ca_eitc.yaml

@@ -3,7 +3,7 @@
   absolute_error_margin: 20
   input:
     employment_income: 20_500
-    eitc_child_count: 0
+    ca_eitc_child_count: 0
   output:
     ca_eitc: 88
 
@@ -54,3 +54,115 @@
     ca_income_tax_before_refundable_credits: 0
     ca_eitc: 0  # too much investment income to be CalEITC eligible
     ca_income_tax: 0
+
+- name: A qualifying ITIN child uses the one-child CalEITC schedule
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      parent:
+        age: 35
+        is_tax_unit_head: true
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+        has_tin: true
+      child:
+        age: 8
+        is_tax_unit_dependent: true
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+        has_tin: true
+    tax_units:
+      unit:
+        members: [parent, child]
+        ca_eitc_eligible: true
+        ca_eitc_earned_income: 1_000
+        adjusted_gross_income: 1_000
+    households:
+      household:
+        members: [parent, child]
+        state_code: CA
+  output:
+    eitc_child_count: 0
+    ca_eitc_child_count: 1
+    # $1,000 * .34 * .85, rather than the childless $65.025.
+    ca_eitc: 289
+
+- name: A child without an SSN or ITIN does not increase CalEITC
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      parent:
+        age: 35
+        is_tax_unit_head: true
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+        has_tin: true
+      child:
+        age: 8
+        is_tax_unit_dependent: true
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+        has_tin: false
+    tax_units:
+      unit:
+        members: [parent, child]
+        ca_eitc_eligible: true
+        ca_eitc_earned_income: 1_000
+        adjusted_gross_income: 1_000
+    households:
+      household:
+        members: [parent, child]
+        state_code: CA
+  output:
+    eitc_child_count: 0
+    ca_eitc_child_count: 0
+    ca_eitc: 65.025
+
+- name: Four ITIN qualifying children use the three-or-more-child CalEITC schedule
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      parent:
+        age: 35
+        is_tax_unit_head: true
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+        has_tin: true
+      child1:
+        age: 12
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+        has_tin: true
+      child2:
+        age: 10
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+        has_tin: true
+      child3:
+        age: 8
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+        has_tin: true
+      child4:
+        age: 6
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+        has_tin: true
+    tax_units:
+      unit:
+        members: [parent, child1, child2, child3, child4]
+        ca_eitc_eligible: true
+        ca_eitc_earned_income: 1_000
+        adjusted_gross_income: 1_000
+    households:
+      household:
+        members: [parent, child1, child2, child3, child4]
+        state_code: CA
+  output:
+    eitc_child_count: 0
+    ca_eitc_child_count: 4
+    # $1,000 * .45 * .85; the count itself is not capped at three.
+    ca_eitc: 382.5

policyengine_us/tests/policy/baseline/gov/states/ca/tax/income/credits/earned_income/ca_eitc_child_count.yaml

@@ -0,0 +1,114 @@
+- name: An ITIN qualifying child does not count before the 2020 extension
+  period: 2019
+  input:
+    people:
+      parent:
+        age: 35
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+        has_tin: true
+      child:
+        age: 8
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+        has_tin: true
+    tax_units:
+      unit:
+        members: [parent, child]
+    households:
+      household:
+        members: [parent, child]
+        state_code: CA
+  output:
+    eitc_child_count: 0
+    ca_eitc_child_count: 0
+
+- name: An ITIN qualifying child counts starting in 2020 without changing the federal count
+  period: 2020
+  input:
+    people:
+      parent:
+        age: 35
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+        has_tin: true
+      child:
+        age: 8
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+        has_tin: true
+    tax_units:
+      unit:
+        members: [parent, child]
+    households:
+      household:
+        members: [parent, child]
+        state_code: CA
+  output:
+    eitc_child_count: 0
+    ca_eitc_child_count: 1
+
+- name: California counts qualifying SSN and ITIN children but excludes missing IDs and nonqualifying dependents
+  period: 2024
+  input:
+    people:
+      parent:
+        age: 35
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+        has_tin: true
+      ssn_child:
+        age: 12
+        is_eitc_qualifying_child: true
+        ssn_card_type: CITIZEN
+        has_tin: true
+      itin_child:
+        age: 10
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+        has_tin: true
+      child_without_id:
+        age: 8
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+        has_tin: false
+      nonqualifying_dependent:
+        age: 25
+        is_eitc_qualifying_child: false
+        ssn_card_type: NONE
+        has_tin: true
+    tax_units:
+      unit:
+        members: [parent, ssn_child, itin_child, child_without_id, nonqualifying_dependent]
+    households:
+      household:
+        members: [parent, ssn_child, itin_child, child_without_id, nonqualifying_dependent]
+        state_code: CA
+  output:
+    eitc_child_count: 1
+    ca_eitc_child_count: 2
+
+- name: A qualifying child with an SSN not valid for employment counts for California
+  period: 2024
+  input:
+    people:
+      parent:
+        age: 35
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+        has_tin: true
+      child:
+        age: 8
+        is_eitc_qualifying_child: true
+        ssn_card_type: OTHER_NON_CITIZEN
+        has_tin: true
+    tax_units:
+      unit:
+        members: [parent, child]
+    households:
+      household:
+        members: [parent, child]
+        state_code: CA
+  output:
+    eitc_child_count: 0
+    ca_eitc_child_count: 1

policyengine_us/tests/policy/baseline/gov/states/ca/tax/income/credits/earned_income/ca_eitc_income_boundary.yaml

@@ -37,7 +37,7 @@
     age: [35, 35, 35, 35]
     state_code: [CA, CA, CA, CA]
     employment_income: [31_950, 31_950, 31_950, 31_950]
-    eitc_child_count: [0, 1, 2, 3]
+    ca_eitc_child_count: [0, 1, 2, 3]
   output:
     ca_eitc_eligible: [true, true, true, true]
     ca_eitc: [0.009155, 0.030057, 0.041937, 0.042520]
@@ -49,7 +49,7 @@
     state_code: [CA, CA, CA, CA]
     employment_income: [31_951, 31_951, 31_951, 31_951]
     adjusted_gross_income: [10_000, 10_000, 10_000, 10_000]
-    eitc_child_count: [0, 1, 2, 3]
+    ca_eitc_child_count: [0, 1, 2, 3]
   output:
     ca_eitc_eligible: [true, true, true, true]
     ca_eitc: [0, 0, 0, 0]

policyengine_us/tests/policy/baseline/gov/states/ca/tax/income/credits/earned_income/ca_eitc_integration.yaml

@@ -4,7 +4,7 @@
   absolute_error_margin: 20
   input:
     state_code: CA
-    eitc_child_count: 3
+    ca_eitc_child_count: 3
     employment_income: 8_000
     # AGI equals earned income so the worksheet's earned-income/AGI credit
     # comparison isolates the table value.
@@ -18,7 +18,7 @@
   absolute_error_margin: 6
   input:
     state_code: CA
-    eitc_child_count: 1
+    ca_eitc_child_count: 1
     employment_income: 6_400
     adjusted_gross_income: 6_400
   output:
@@ -30,7 +30,7 @@
   absolute_error_margin: 2
   input:
     state_code: CA
-    eitc_child_count: 0
+    ca_eitc_child_count: 0
     employment_income: 9_951
     adjusted_gross_income: 9_951
   output: