Let a qualifying child without an SSN establish EITC eligibility from 2021

changelog.d/eitc-no-ssn-child-age-test.fixed.md

@@ -0,0 +1 @@
+From 2021, a filer whose only qualifying child lacks a valid SSN gets the zero-child EITC without the childless age test (IRC 32(c)(1)(A)(i); ARPA section 9622).

policyengine_us/tests/policy/baseline/gov/irs/credits/earned_income/eitc_demographic_eligible_child_without_ssn.yaml

@@ -0,0 +1,195 @@
+# From 2021, a filer whose only qualifying child lacks a valid SSN is still an
+# eligible individual with a qualifying child (IRC 32(c)(1)(A)(i)); the child
+# is left out only of the amount (32(c)(3)(D), (m)). ARPA section 9622 struck
+# former 32(c)(1)(F). So the filer gets the zero-child amount without the
+# childless age test.
+
+- name: TY2023 parent age 20 with only qualifying child lacking SSN
+  period: 2023
+  input:
+    people:
+      filer:
+        age: 20
+        is_tax_unit_head: true
+        is_full_time_student: false
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+      child:
+        age: 2
+        is_tax_unit_dependent: true
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+    tax_units:
+      unit:
+        members: [filer, child]
+        filing_status: SINGLE
+        eitc_earned_income: 8_000
+        adjusted_gross_income: 8_000
+        eitc_relevant_investment_income: 0
+        would_file_taxes_voluntarily: true
+        takes_up_eitc: true
+  output:
+    eitc_child_count: 0
+    eitc_demographic_eligible: true
+    eitc_eligible: true
+    # Zero-child schedule: min($600, 7.65% x $8,000 = $612) = $600; $8,000 is
+    # below the $9,800 phase-out start.
+    eitc: 600
+
+- name: TY2021 student parent age 20 with only qualifying child lacking SSN
+  period: 2021
+  input:
+    people:
+      filer:
+        age: 20
+        is_tax_unit_head: true
+        is_full_time_student: true
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+      child:
+        age: 2
+        is_tax_unit_dependent: true
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+    tax_units:
+      unit:
+        members: [filer, child]
+        filing_status: SINGLE
+        eitc_earned_income: 10_000
+        adjusted_gross_income: 10_000
+        eitc_relevant_investment_income: 0
+        would_file_taxes_voluntarily: true
+        takes_up_eitc: true
+  output:
+    eitc_child_count: 0
+    # The 2021 specified-student minimum age of 24 does not apply: the filer
+    # has a qualifying child.
+    eitc_demographic_eligible: true
+    eitc_eligible: true
+    # Zero-child schedule: min($1,502, 15.3% x $10,000 = $1,530) = $1,502;
+    # $10,000 is below the $11,610 phase-out start.
+    eitc: 1_502
+
+- name: TY2021 married separate student parent age 20 whose only qualifying child lacks an SSN
+  # The child without an SSN does both jobs: it is the qualifying child the
+  # separated-spouse exception needs (IRC 32(d)(2)(B), counted before
+  # identification), and it establishes eligibility without the 2021
+  # specified-student minimum age of 24 (32(c)(1)(A)(i)). It stays out of
+  # the amount (32(c)(3)(D)), so the zero-child schedule applies.
+  period: 2021
+  input:
+    people:
+      filer:
+        age: 20
+        is_tax_unit_head: true
+        is_full_time_student: true
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+      child:
+        age: 2
+        is_tax_unit_dependent: true
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+    tax_units:
+      unit:
+        members: [filer, child]
+        filing_status: SEPARATE
+        eitc_spouses_lived_apart_last_six_months: true
+        eitc_earned_income: 8_000
+        adjusted_gross_income: 8_000
+        eitc_relevant_investment_income: 0
+        would_file_taxes_voluntarily: true
+        takes_up_eitc: true
+  output:
+    eitc_child_count: 0
+    eitc_marital_eligible: true
+    eitc_demographic_eligible: true
+    eitc_eligible: true
+    # Zero-child schedule: min($1,502, 15.3% x $8,000 = $1,224) = $1,224;
+    # $8,000 is below the $11,610 phase-out start.
+    eitc: 1_224
+
+- name: TY2020 parent age 20 with only qualifying child lacking SSN stays ineligible
+  period: 2020
+  input:
+    people:
+      filer:
+        age: 20
+        is_tax_unit_head: true
+        is_full_time_student: false
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+      child:
+        age: 2
+        is_tax_unit_dependent: true
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+    tax_units:
+      unit:
+        members: [filer, child]
+        filing_status: SINGLE
+        eitc_earned_income: 6_000
+        adjusted_gross_income: 6_000
+        eitc_relevant_investment_income: 0
+        would_file_taxes_voluntarily: true
+        takes_up_eitc: true
+  output:
+    # Before 2021 the identification-filtered count decides, as on main: the
+    # filer is under the childless minimum age of 25.
+    eitc_child_count: 0
+    eitc_demographic_eligible: false
+    eitc: 0
+
+- name: TY2023 parent age 20 whose child has an SSN gets the one-child credit
+  period: 2023
+  input:
+    people:
+      filer:
+        age: 20
+        is_tax_unit_head: true
+        is_full_time_student: false
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+      child:
+        age: 2
+        is_tax_unit_dependent: true
+        is_eitc_qualifying_child: true
+        ssn_card_type: CITIZEN
+    tax_units:
+      unit:
+        members: [filer, child]
+        filing_status: SINGLE
+        eitc_earned_income: 8_000
+        adjusted_gross_income: 8_000
+        eitc_relevant_investment_income: 0
+        would_file_taxes_voluntarily: true
+        takes_up_eitc: true
+  output:
+    eitc_child_count: 1
+    eitc_demographic_eligible: true
+    eitc_eligible: true
+    # One child: 34% x $8,000 = $2,720, below the $3,995 maximum.
+    eitc: 2_720
+
+- name: TY2023 parent age 20 with no qualifying child stays ineligible
+  period: 2023
+  input:
+    people:
+      filer:
+        age: 20
+        is_tax_unit_head: true
+        is_full_time_student: false
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+    tax_units:
+      unit:
+        members: [filer]
+        filing_status: SINGLE
+        eitc_earned_income: 8_000
+        adjusted_gross_income: 8_000
+        eitc_relevant_investment_income: 0
+        would_file_taxes_voluntarily: true
+        takes_up_eitc: true
+  output:
+    eitc_demographic_eligible: false
+    eitc: 0

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

@@ -222,7 +222,13 @@
     ca_eitc_eligible: true
     ca_yctc: 1_189
 
-- name: CalEITC retains its own age rules for an eligible separated parent
+- name: CalEITC and the federal zero-child credit both reach a separated parent aged 20 whose child lacks an SSN
+  # The child without an SSN meets the federal separated-spouse exception
+  # (IRC 32(d)(2)(B), counted before identification) and, from 2021,
+  # establishes federal eligibility without the childless age test
+  # (32(c)(1)(A)(i)), but stays out of the amount (32(c)(3)(D)). Federal
+  # zero-child 2025: min(649, 0.0765 x 8,639 = 660.88) = 649, below the
+  # 10,620 phase-out start. CalEITC applies its own rules and is unchanged.
   period: 2025
   input:
     people:
@@ -245,7 +251,8 @@
   output:
     eitc_child_count: 0
     eitc_marital_eligible: true
-    eitc_eligible: false
+    eitc_eligible: true
+    eitc: 649
     ca_eitc_eligible: true
     ca_yctc: 1_189
 

policyengine_us/tests/policy/baseline/gov/states/dc/tax/income/dc_eitc.yaml

@@ -508,7 +508,7 @@
     dc_eitc_without_qualifying_child: 0
     dc_eitc: 321.3
 
-- name: Without the TIN rule, a filer under 25 whose qualifying child has no TIN gets no DC EITC in 2023
+- name: Without the TIN rule, a filer under 25 whose qualifying child has no TIN gets the with-child match on the self-only credit in 2023
   period: 2023
   absolute_error_margin: 0.01
   input:
@@ -533,14 +533,20 @@
         members: [head, dependent]
         state_code: DC
   output:
-    # With no child in the count, the federal demographic test falls back on
-    # the childless minimum age of 25, as the federal credit that is the
-    # pre-2023 base does, so the self-only amount is 0.
-    eitc: 0
+    # From 2021 a filer whose only qualifying child lacks a TIN is an
+    # eligible individual under IRC 32(c)(1)(A)(i), which has no age test:
+    # ARPA section 9622 struck former 32(c)(1)(F). 32(c)(3)(D)(i) leaves the
+    # child out of the amount, so the federal credit is the zero-child
+    # amount: min($600, 7.65% x $6,000 = $459) = $459, with earnings and AGI
+    # of $6,000 below the $9,800 phase-out start.
+    eitc: 459
+    # D.C. Code 47-1806.04(f)(4) gives "qualifying child" its IRC 32
+    # meaning, so the filer still has one, and (f)(1)(B-1) allows 70% of the
+    # federal credit allowed: 0.7 x 459 = 321.30.
     dc_eitc_has_qualifying_child: true
-    dc_eitc_with_qualifying_child: 0
+    dc_eitc_with_qualifying_child: 321.3
     dc_eitc_without_qualifying_child: 0
-    dc_eitc: 0
+    dc_eitc: 321.3
 
 - name: DC EITC uses the one-child credit for an ITIN child in TY2023 at low earnings
   period: 2023

policyengine_us/tests/policy/baseline/gov/states/nj/tax/income/credits/eitc/nj_eitc.yaml

@@ -194,12 +194,14 @@
     nj_childless_eitc_age_eligible: true
     nj_eitc: 259.60
 
-- name: Separate filer who meets the federal exception through a child without an SSN gets no NJ age fallback
-  # The child counts for IRC 32(d)(2)(B) but not for the federal schedule
-  # (32(c)(3)(D)), so eitc_child_count is 0 and the filer, at 22, is below
-  # the federal minimum age. The filer meets the federal marital test, but
-  # N.J.S.A. 54A:4-7a.(3) requires a married claimant to file jointly, so
-  # the age fallback pays 0.
+- name: Separate filer who meets the federal exception through a child without an SSN gets the federal credit but no NJ EITC
+  # The child counts for IRC 32(d)(2)(B) and, from 2021, establishes federal
+  # eligibility without the childless age test (32(c)(1)(A)(i)), but not
+  # for the federal schedule (32(c)(3)(D)). So eitc_child_count is 0 and
+  # the 22-year-old gets the zero-child credit: min(649, 0.0765 x 8,000 =
+  # 612) = 612, below the 10,620 phase-out start. N.J.S.A. 54A:4-7a.(3)
+  # requires a married claimant to file jointly, so NJ pays 0 on both the
+  # federal route (otherwise 0.4 x 612 = 244.80) and the age fallback.
   period: 2025
   input:
     people:
@@ -221,6 +223,8 @@
   output:
     eitc_marital_eligible: true
     eitc_child_count: 0
+    eitc_demographic_eligible: true
+    eitc: 612
     nj_eitc_separate_filer_eligible: false
     nj_childless_eitc_age_eligible: false
     nj_eitc: 0
@@ -253,11 +257,11 @@
     nj_eitc_separate_filer_eligible: false
     nj_eitc: 0
 
-- name: Separate filer on the separation-instrument route with a child without an SSN gets no NJ age fallback
-  # The instrument route meets the federal marital test, and the child
-  # without an SSN leaves eitc_child_count at 0, so the 22-year-old reaches
-  # only the age fallback. N.J.S.A. 54A:4-7a.(3) bars a married separate
-  # filer from it.
+- name: Separate filer on the separation-instrument route with a child without an SSN gets the federal credit but no NJ EITC
+  # The instrument route meets the federal marital test. The child without
+  # an SSN makes the 22-year-old federally eligible but leaves
+  # eitc_child_count at 0, so the federal credit is the zero-child 612.
+  # N.J.S.A. 54A:4-7a.(3) bars a married separate filer from both NJ routes.
   period: 2025
   input:
     people:
@@ -278,6 +282,7 @@
         state_code: NJ
   output:
     eitc_marital_eligible: true
+    eitc: 612
     nj_childless_eitc_age_eligible: false
     nj_eitc: 0
 
@@ -365,3 +370,83 @@
     eitc: 0
     nj_childless_eitc_age_eligible: true
     nj_eitc: 259.60
+
+# N.J.S.A. 54A:4-7(a), as amended by P.L. 2021, c.130. Paragraph (1): a
+# resident eligible for the federal credit gets a percentage of "the federal
+# earned income tax credit that would be allowed". Paragraph (4): a resident
+# at least 18 who "cannot claim a qualifying child" and is ineligible for the
+# federal credit "due to age requirements" gets a credit "predicated on the
+# federal maximum amount for taxpayers with no qualifying child".
+
+- name: 2023 NJ parent aged 20 whose only child lacks an SSN gets 40% of the federal credit allowed
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      filer:
+        age: 20
+        is_tax_unit_head: true
+        is_full_time_student: false
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+        employment_income: 3_000
+      child:
+        age: 2
+        is_tax_unit_dependent: true
+        is_eitc_qualifying_child: true
+        ssn_card_type: NONE
+    tax_units:
+      unit:
+        members: [filer, child]
+        filing_status: SINGLE
+        eitc_relevant_investment_income: 0
+        would_file_taxes_voluntarily: true
+        takes_up_eitc: true
+    households:
+      household:
+        members: [filer, child]
+        state_code: NJ
+  output:
+    # From 2021 the child without an SSN makes the filer federally eligible
+    # (IRC 32(c)(1)(A)(i)) but is left out of the amount (32(c)(3)(D)), so the
+    # zero-child schedule applies: 7.65% x $3,000 = $229.50, below the $600
+    # maximum.
+    eitc_child_count: 0
+    eitc_eligible: true
+    eitc: 229.50
+    # Paragraph (4) reaches only a resident ineligible for the federal credit
+    # "due to age requirements". This filer is federally eligible, so
+    # paragraph (1) governs: 40% x $229.50 = $91.80 (54A:4-7(a)(1)).
+    nj_eitc: 91.80
+
+- name: 2023 NJ childless filer aged 20 gets 40% of the federal zero-child maximum
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      filer:
+        age: 20
+        is_tax_unit_head: true
+        is_full_time_student: false
+        is_eitc_qualifying_child: false
+        ssn_card_type: CITIZEN
+        employment_income: 3_000
+    tax_units:
+      unit:
+        members: [filer]
+        filing_status: SINGLE
+        eitc_relevant_investment_income: 0
+        would_file_taxes_voluntarily: true
+        takes_up_eitc: true
+    households:
+      household:
+        members: [filer]
+        state_code: NJ
+  output:
+    # Under the federal childless minimum age of 25, so no federal credit.
+    eitc_eligible: false
+    eitc: 0
+    # Ineligible federally only because of age and without a qualifying
+    # child: 40% x the $600 zero-child maximum = $240 (54A:4-7(a)(4)).
+    nj_childless_eitc_age_eligible: true
+    nj_eitc: 240