Phase out Vermont's child tax credit per child

changelog.d/vt-ctc-per-child-phase-out.fixed.md

@@ -0,0 +1 @@
+Reduce each child's Vermont child tax credit by $20 for each $1,000 of AGI over $125,000, as 32 V.S.A. 5830f(b) requires, instead of taking one reduction off the total, so the credit ends above $174,000 of AGI for any number of children.

policyengine_us/parameters/gov/states/vt/tax/income/credits/ctc/age_limit.yaml

@@ -10,13 +10,11 @@ metadata:
       href: https://legislature.vermont.gov/statutes/section/32/151/05830f
     - title: Vt. 2022 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income%20Booklet-2022.pdf#page=17
-    - title: Vt. 2021 Tax Form # Child Tax Credit was introduced in 2022
-      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2021.pdf#page=24
     - title: Vt. 2023 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2023.pdf#page=33
     - title: Vt. 2024 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income%20Booklet-2024.pdf#page=33
     - title: Vt. 2025 Income Tax Return Booklet
-      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2025.pdf#page=35
-    - title: S.51 (2025) - Vermont tax credit package extends CTC to 6-year-olds
-      href: https://legislature.vermont.gov/Documents/2026/Docs/BILLS/S-0051/S-0051%20As%20Passed%20by%20Both%20House%20and%20Senate%20Official.pdf#page=6
+      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2025.pdf#page=34
+    - title: "2025 Vt. Act 71, Secs. 1 and 6 #page 1,10"
+      href: https://legislature.vermont.gov/Documents/2026/Docs/ACTS/ACT071/ACT071%20As%20Enacted.pdf#page=1

policyengine_us/parameters/gov/states/vt/tax/income/credits/ctc/amount.yaml

@@ -9,11 +9,9 @@ metadata:
       href: https://legislature.vermont.gov/statutes/section/32/151/05830f
     - title: Vt. 2022 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income%20Booklet-2022.pdf#page=17
-    - title: Vt. 2021 Tax Form # Child Tax Credit was introduced in 2022
-      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2021.pdf#page=24
     - title: Vt. 2023 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2023.pdf#page=33
     - title: Vt. 2024 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income%20Booklet-2024.pdf#page=33
     - title: Vt. 2025 Income Tax Return Booklet
-      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2025.pdf#page=35
+      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2025.pdf#page=34

policyengine_us/parameters/gov/states/vt/tax/income/credits/ctc/reduction/amount.yaml

@@ -1,19 +1,17 @@
-description: Vermont reduces the Child Tax Credit by this amount for each increment of adjusted gross income exceeding the threshold.
+description: Vermont reduces the Child Tax Credit for each qualifying child by this amount for each increment of adjusted gross income exceeding the threshold.
 values:
   2022-01-01: 20
 metadata:
   unit: currency-USD
-  label: Vermont CTC reduction amount
+  label: Vermont CTC reduction amount per child
   reference:
     - title: Vt. Stat. tit. 32 § 5830f Section (b)
       href: https://legislature.vermont.gov/statutes/section/32/151/05830f
     - title: Vt. 2022 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income%20Booklet-2022.pdf#page=17
-    - title: Vt. 2021 Tax Form # Child Tax Credit was introduced in 2022
-      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2021.pdf#page=24
     - title: Vt. 2023 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2023.pdf#page=33
     - title: Vt. 2024 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income%20Booklet-2024.pdf#page=33
     - title: Vt. 2025 Income Tax Return Booklet
-      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2025.pdf#page=35
+      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2025.pdf#page=34

policyengine_us/parameters/gov/states/vt/tax/income/credits/ctc/reduction/increment.yaml

@@ -9,11 +9,9 @@ metadata:
       href: https://legislature.vermont.gov/statutes/section/32/151/05830f
     - title: Vt. 2022 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income%20Booklet-2022.pdf#page=17
-    - title: Vt. 2021 Tax Form # Child Tax Credit was introduced in 2022
-      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2021.pdf#page=24
     - title: Vt. 2023 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2023.pdf#page=33
     - title: Vt. 2024 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income%20Booklet-2024.pdf#page=33
     - title: Vt. 2025 Income Tax Return Booklet
-      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2025.pdf#page=35
+      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2025.pdf#page=34

policyengine_us/parameters/gov/states/vt/tax/income/credits/ctc/reduction/start.yaml

@@ -9,11 +9,9 @@ metadata:
       href: https://legislature.vermont.gov/statutes/section/32/151/05830f
     - title: Vt. 2022 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income%20Booklet-2022.pdf#page=17
-    - title: Vt. 2021 Tax Form # Child Tax Credit was introduced in 2022
-      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2021.pdf#page=24
     - title: Vt. 2023 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2023.pdf#page=33
     - title: Vt. 2024 Income Tax Return Booklet
       href: https://tax.vermont.gov/sites/tax/files/documents/Income%20Booklet-2024.pdf#page=33
     - title: Vt. 2025 Income Tax Return Booklet
-      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2025.pdf#page=35
+      href: https://tax.vermont.gov/sites/tax/files/documents/Income-Booklet-2025.pdf#page=34

policyengine_us/tests/core/test_vt_ctc_phase_out_properties.py

@@ -0,0 +1,89 @@
+"""Properties of Vermont's child tax credit phase-out.
+
+32 V.S.A. 5830f(a) gives $1,000 per qualifying child, and 5830f(b) reduces
+"the amount of the credit per child", but not below zero, by $20 for each
+$1,000, or fraction thereof, of adjusted gross income over $125,000.
+
+Hypothesis draws a year, a number of children and a list of AGIs, with the
+phase-out's edges mixed in. Each AGI appears twice in one vectorized
+simulation, once with one child and once with the drawn number. For every
+AGI:
+
+1. The credit is never below zero and never above $1,000 per child, because
+   (b) reduces it "but not below zero" and (a) pays $1,000 per child.
+2. The credit never rises with AGI for the same children, because the
+   reduction in (b) grows with each $1,000 of AGI over $125,000.
+3. n children get n times one child's credit, because (b) reduces each
+   child's credit. A single reduction off the total fails this at any AGI
+   over $125,000.
+
+The YAML cases for vt_ctc pin the amounts at the edges by hand.
+"""
+
+import numpy as np
+from hypothesis import HealthCheck, example, given, settings
+from hypothesis import strategies as st
+
+from policyengine_us import Simulation
+
+AMOUNT = 1_000  # 5830f(a): "$1,000.00 per qualifying child"
+TOLERANCE = 0.01
+# The start of the phase-out, the first fraction of $1,000 above it, the last
+# $20 of credit per child (AGI $173,001 to $174,000) and the first AGI with
+# none, per the 2025 Schedule IN-112 Child Tax Credit Table.
+EDGES = [0, 125_000, 125_001, 126_000, 126_001, 150_000, 174_000, 174_001, 175_000]
+# 2022 is the credit's first year; the age limit rose from 5 to 6 in 2025.
+YEARS = [2022, 2024, 2025, 2026]
+
+agi_values = st.one_of(st.sampled_from(EDGES), st.integers(0, 300_000))
+
+
+def build_situation(agis, n_children, year):
+    """One tax unit with one child and one with n children for each AGI."""
+    people, tax_units, households = {}, {}, {}
+    for i, agi in enumerate(agis):
+        for kids in (1, n_children):
+            name = f"unit_{i}_{kids}"
+            members = [f"{name}_parent"]
+            people[members[0]] = {"age": {year: 35}}
+            for k in range(kids):
+                members.append(f"{name}_child_{k}")
+                # Ages 0 to 5 are within the age limit in every year.
+                people[members[-1]] = {"age": {year: k % 6}}
+            tax_units[name] = {
+                "members": members,
+                "adjusted_gross_income": {year: float(agi)},
+            }
+            households[name] = {"members": members, "state_code": {year: "VT"}}
+    return {"people": people, "tax_units": tax_units, "households": households}
+
+
+@settings(
+    max_examples=10,
+    deadline=None,
+    derandomize=True,
+    suppress_health_check=[HealthCheck.too_slow],
+)
+@given(
+    year=st.sampled_from(YEARS),
+    agis=st.lists(agi_values, min_size=5, max_size=20),
+    n_children=st.integers(2, 4),
+)
+@example(year=2025, agis=EDGES, n_children=2)
+@example(year=2022, agis=EDGES, n_children=4)
+# No vt_ctc.yaml case covers 2026, so this example checks the per-child
+# reduction in a year that file leaves out.
+@example(year=2026, agis=EDGES, n_children=3)
+def test_vt_ctc_phase_out_properties(year, agis, n_children):
+    agis = sorted(agis)
+    sim = Simulation(situation=build_situation(agis, n_children, year))
+    ctc = np.asarray(sim.calculate("vt_ctc", year), dtype=float).reshape(-1, 2)
+    one, many = ctc[:, 0], ctc[:, 1]
+    for credit, kids in ((one, 1), (many, n_children)):
+        # 1. Never below zero, never above $1,000 per child.
+        assert np.all(credit >= 0)
+        assert np.all(credit <= AMOUNT * kids + TOLERANCE)
+        # 2. Never rises with AGI (the AGIs are sorted).
+        assert np.all(np.diff(credit) <= TOLERANCE)
+    # 3. The reduction applies to each child's credit.
+    np.testing.assert_allclose(many, n_children * one, atol=TOLERANCE)