Set the DC EITC with-children match to 85% for 2026-2028

changelog.d/dc-eitc-match-2025.fixed.md

@@ -0,0 +1 @@
+Set the DC EITC match for filers with qualifying children to 85% for 2026 through 2028 and 100% from 2029, after the temporary 100% match for 2025 expired.

policyengine_us/parameters/gov/states/dc/tax/income/credits/eitc/with_children/match.yaml

@@ -6,6 +6,10 @@ metadata:
   reference:
     - title: Code of the District of Columbia § 47–1806.04 (f)(1)
       href: https://code.dccouncil.gov/us/dc/council/code/sections/47-1806.04#(f)(1)
+    - title: D.C. Income and Franchise Tax Conformity and Revision Emergency Amendment Act of 2025 (D.C. Act 26-214), § 2(i)
+      href: https://code.dccouncil.gov/us/dc/council/acts/26-214
+    - title: D.C. Income and Franchise Tax Conformity and Revision Temporary Amendment Act of 2025 (D.C. Law 26-89), § 2(i)
+      href: https://code.dccouncil.gov/us/dc/council/laws/26-89
     - title: 2023 DC Form D-40 Booklet, Page 34, Line 27c
       href: https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2023_D40_Book_Final_012324.pdf#page=34
     - title: 2024 DC Form D-40 Booklet, Page 34, Line 27c
@@ -17,4 +21,12 @@ metadata:
 values:
   2015-01-01: 0.4 # (f)(1)(A) and (f)(1)(B)
   2022-01-01: 0.7 # (f)(1)(B-1)
-  2025-01-01: 1 # (f)(1)(B-2) - DC Code already updated to reflect 100% match
+  # D.C. Act 26-214 § 2(i) (emergency, Dec. 3, 2025 to Mar. 3, 2026) and
+  # D.C. Law 26-89 § 2(i) (temporary, Feb. 12 to Sep. 25, 2026) set (B-2) to
+  # 100% for taxable years after 2024 and repealed (B-3).
+  2025-01-01: 1
+  # With the temporary law expired, the permanent (B-2) gives 85% for taxable
+  # years beginning after December 31, 2024, and (B-3) gives 100% after
+  # December 31, 2028.
+  2026-01-01: 0.85 # (f)(1)(B-2)
+  2029-01-01: 1 # (f)(1)(B-3)

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

@@ -125,3 +125,88 @@
     # wages, so federal earned income is $6,000 (Form 1040 EIC Worksheet B,
     # line 4b, combines both spouses' amounts on a joint return).
     dc_eitc_with_qualifying_child: 1_428
+
+- name: DC EITC with a qualifying child is 85% of the federal credit in 2026 (permanent (B-2))
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      head:
+        age: 30
+        employment_income: 10_000
+        is_tax_unit_head: true
+      child:
+        age: 5
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [head, child]
+        filing_status: HEAD_OF_HOUSEHOLD
+    spm_units:
+      spm_unit:
+        members: [head, child]
+    households:
+      household:
+        members: [head, child]
+        state_code: DC
+  output:
+    # Federal EITC: 34% phase-in x $10,000 = $3,400, below the one-child
+    # maximum. DC: 85% x $3,400 = $2,890.
+    eitc: 3_400
+    dc_eitc_with_qualifying_child: 2_890
+
+- name: DC EITC with a qualifying child is still 85% in 2028
+  period: 2028
+  absolute_error_margin: 0.01
+  input:
+    people:
+      head:
+        age: 30
+        employment_income: 10_000
+        is_tax_unit_head: true
+      child:
+        age: 5
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [head, child]
+        filing_status: HEAD_OF_HOUSEHOLD
+    spm_units:
+      spm_unit:
+        members: [head, child]
+    households:
+      household:
+        members: [head, child]
+        state_code: DC
+  output:
+    # 85% x (34% x $10,000) = $2,890.
+    eitc: 3_400
+    dc_eitc_with_qualifying_child: 2_890
+
+- name: DC EITC with a qualifying child returns to 100% in 2029 ((B-3))
+  period: 2029
+  absolute_error_margin: 0.01
+  input:
+    people:
+      head:
+        age: 30
+        employment_income: 10_000
+        is_tax_unit_head: true
+      child:
+        age: 5
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [head, child]
+        filing_status: HEAD_OF_HOUSEHOLD
+    spm_units:
+      spm_unit:
+        members: [head, child]
+    households:
+      household:
+        members: [head, child]
+        state_code: DC
+  output:
+    # 100% x (34% x $10,000) = $3,400.
+    eitc: 3_400
+    dc_eitc_with_qualifying_child: 3_400

source_conflicts/candidates.yaml

@@ -1706,6 +1706,51 @@ candidates:
     no DC source settles years before 2023 and that setting it to false applies the DC-law reading. The October
     2026 ruling chose the childless schedule; verify ARPA's effect before identifying a statutory departure and
     establish any pre-2021 conflict separately.
+- id: us-dc:eitc-with-children-2025-rate
+  program: income-tax
+  years:
+    from: 2025
+    to: 2025
+    type: tax
+  question: Does the TY2025 DC EITC for filers with qualifying children match 100% of the federal credit under the
+    emergency and temporary acts in force through the filing season, or 85% under the permanent (B-2) as codified
+    after the temporary law expired?
+  sources:
+  - kind: statute
+    citation: D.C. Code §47-1806.04(f)(1)(B-2), permanent text, 85% for taxable years beginning after December 31,
+      2024
+    url: https://code.dccouncil.gov/us/dc/council/code/sections/47-1806.04#(f)(1)
+  - kind: statute
+    citation: D.C. Act 26-214 §2(i) (emergency, December 3, 2025 to March 3, 2026)
+    url: https://code.dccouncil.gov/us/dc/council/acts/26-214
+  - kind: statute
+    citation: D.C. Law 26-89 §2(i) (temporary, February 12 to September 25, 2026)
+    url: https://code.dccouncil.gov/us/dc/council/laws/26-89
+  - kind: guidance
+    citation: D.C. Attorney General opinion on decoupling, retroactivity and validity, February 24, 2026
+    url: https://oag.dc.gov/sites/default/files/2026-02/AG-Opinion-Decoupling-Retroactivity-and-Validity-.pdf
+  - kind: guidance
+    citation: OTR EITC FAQs, percent of federal EIC by tax year
+    url: https://otr.cfo.dc.gov/page/eitc-faqs
+  - kind: instructions
+    citation: 2025 D-40 booklet, line 27d, PDF p.43
+    url: https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2025_D40_Book_082026_v1.pdf#page=43
+  readings:
+    statute: The emergency act applied as of January 1, 2025, and held at the close of 2025, and the temporary law
+      held through the filing season, so TY2025 is 100%.
+    other: The permanent text, once the temporary law expired, gives 85% for every year after 2024.
+  example: Head of household, $10,000 wages, one child, TY2025, federal EITC $3,400. `dc_eitc` is $3,400 at 100%
+    and $2,890 at 85%.
+  pe_us:
+    follows: statute
+    code:
+    - policyengine_us/parameters/gov/states/dc/tax/income/credits/eitc/with_children/match.yaml
+    prs:
+    - https://github.com/PolicyEngine/policyengine-us/pull/10638
+  state: ruled
+  note: PE-US applies 100% for 2025, 85% for 2026 to 2028 and 100% from 2029. The Attorney General concluded that
+    H.J.Res. 142 did not repeal the temporary act, and OTR's FAQ and the 2025 D-40 booklet both use 100% for 2025.
+    A later FY2027 Budget Support Act could change 2026 onward.
 - id: us-dc:liheap-income-floor-vs-smi-limit
   program: liheap
   years: