From 7ec06252b42b4172d98b2fec781fddde2f20fc28 Mon Sep 17 00:00:00 2001 From: Max Ghenis Date: Sun, 11 Oct 2026 11:37:14 -0400 Subject: [PATCH 1/7] Coordinate Colorado's federal deduction addback with the state income tax addback Rule 39-22-104(3)(p)(3)(a)(i) and the DR 0104 line 4 instructions (2023-2025) reduce the itemized or standard deduction addback by the Schedule A state income tax already added back on line 2. DR 0104AMT line 2 sums DR 0104 lines 3-7 and 9, leaving out the line 2 addback. Co-Authored-By: Claude Opus 5.5 --- ...al-deduction-addback-coordination.fixed.md | 1 + .../co_federal_deduction_addback.yaml | 55 +++++++++++++++++++ ...co_alternative_minimum_taxable_income.yaml | 14 +++++ .../co_federal_deduction_addback.py | 13 ++++- .../co_alternative_minimum_taxable_income.py | 9 ++- 5 files changed, 89 insertions(+), 3 deletions(-) create mode 100644 changelog.d/co-federal-deduction-addback-coordination.fixed.md diff --git a/changelog.d/co-federal-deduction-addback-coordination.fixed.md b/changelog.d/co-federal-deduction-addback-coordination.fixed.md new file mode 100644 index 00000000000..8ffbc5b25ce --- /dev/null +++ b/changelog.d/co-federal-deduction-addback-coordination.fixed.md @@ -0,0 +1 @@ +Reduce Colorado's federal deduction addback by the state income tax already added back, and leave that addback out of Colorado alternative minimum taxable income. diff --git a/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/additions/federal_deduction/co_federal_deduction_addback.yaml b/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/additions/federal_deduction/co_federal_deduction_addback.yaml index b0b2b741e39..600921f941d 100644 --- a/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/additions/federal_deduction/co_federal_deduction_addback.yaml +++ b/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/additions/federal_deduction/co_federal_deduction_addback.yaml @@ -370,3 +370,58 @@ standard_deduction: 2_000 output: co_federal_deduction_addback: 1_000 + +# Rule 39-22-104(3)(p)(3)(a)(i) and the DR 0104 line 4 instructions (2023 to +# 2025): the addback is reduced by the Schedule A state income tax already +# added back on DR 0104 line 2. +- name: Case 36, 2025 single itemizer, addback reduced by the state income tax addback. + period: 2025 + input: + state_code: CO + co_federal_deduction_addback_required: true + filing_status: SINGLE + tax_unit_itemizes: true + itemized_taxable_income_deductions: 20_000 + co_state_addback: 5_000 + output: + # 20,000 - 12,000 - 5,000 + co_federal_deduction_addback: 3_000 + +- name: Case 37, 2025 joint itemizer, state income tax addback above the excess leaves no addback. + period: 2025 + input: + state_code: CO + co_federal_deduction_addback_required: true + filing_status: JOINT + tax_unit_itemizes: true + itemized_taxable_income_deductions: 30_000 + co_state_addback: 20_000 + output: + # max(0, 30,000 - 16,000 - 20,000) + co_federal_deduction_addback: 0 + +- name: Case 38, 2022 single itemizer, addback reduced by the state income tax addback. + period: 2022 + input: + state_code: CO + co_federal_deduction_addback_required: true + filing_status: SINGLE + tax_unit_itemizes: true + itemized_taxable_income_deductions: 40_000 + co_state_addback: 4_000 + output: + # 40,000 - 30,000 - 4,000 + co_federal_deduction_addback: 6_000 + +- name: Case 39, 2026 single itemizer, addback reduced by the state income tax addback. + period: 2026 + input: + state_code: CO + co_federal_deduction_addback_required: true + filing_status: SINGLE + tax_unit_itemizes: true + itemized_taxable_income_deductions: 20_000 + co_state_addback: 5_000 + output: + # 20,000 - 1,000 - 5,000 + co_federal_deduction_addback: 14_000 diff --git a/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.yaml b/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.yaml index 35a377bc3f2..bee7f97946b 100644 --- a/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.yaml +++ b/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.yaml @@ -31,3 +31,17 @@ output: # max(0, 0 + 0 - 50,000) = 0 co_alternative_minimum_taxable_income: 0 + +# DR 0104AMT (2025), line 2: the sum of DR 0104 lines 3 through 7 and 9, which +# leaves out the state income tax addback on DR 0104 line 2. +- name: CO AMTI leaves out the state income tax addback + period: 2025 + input: + amt_income_less_exemptions: 200_000 + co_additions: 10_000 + co_state_addback: 6_000 + co_subtractions: 5_000 + state_code: CO + output: + # 200,000 + (10,000 - 6,000) - 5,000 + co_alternative_minimum_taxable_income: 199_000 diff --git a/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py b/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py index feb488e21dd..9af141f36ec 100644 --- a/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py +++ b/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py @@ -17,6 +17,12 @@ class co_federal_deduction_addback(Variable): "https://tax.colorado.gov/sites/tax/files/documents/DR_104_Book_2022.pdf#page=5", # Individual Income Tax Guide - Part 3 Additions to Taxable Income - Federal itemized or standard deductions "https://tax.colorado.gov/individual-income-tax-guide", + # 1 CCR 201-2, Rule 39-22-104(3)(p)(3): coordination with other addbacks. + "https://www.law.cornell.edu/regulations/colorado/39-22-104(3-parens-p)", + # DR 0104 line 4 instructions, 2023 to 2025. + "https://tax.colorado.gov/sites/tax/files/documents/Book0104_2023.pdf#page=6", + "https://tax.colorado.gov/sites/tax/files/documents/DR0104_book_2024.pdf#page=9", + "https://tax.colorado.gov/sites/tax/files/documents/Book104_2025.pdf#page=9", ) defined_for = "co_federal_deduction_addback_required" @@ -32,4 +38,9 @@ def formula(tax_unit, period, parameters): ) filing_status = tax_unit("filing_status", period) exemption = p.exemption[filing_status] - return max_(deductions - exemption, 0) + # Rule 39-22-104(3)(p)(3)(a)(i) reduces this addition by the state + # income tax already added back under C.R.S. 39-22-104(3)(d)(I) + # (DR 0104 line 2), but not by a share of state income tax deducted by a + # partnership or S corporation, which co_state_addback does not include. + state_income_tax_addback = tax_unit("co_state_addback", period) + return max_(deductions - exemption - state_income_tax_addback, 0) diff --git a/policyengine_us/variables/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.py b/policyengine_us/variables/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.py index 99a985d0093..337e74f0244 100644 --- a/policyengine_us/variables/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.py +++ b/policyengine_us/variables/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.py @@ -11,6 +11,7 @@ class co_alternative_minimum_taxable_income(Variable): reference = [ "https://tax.colorado.gov/DR0104AMT", "https://law.justia.com/codes/colorado/2022/title-39/article-22/part-1/section-39-22-105/", + "https://tax.colorado.gov/sites/tax/files/documents/DR0104AMT_2025.pdf#page=1", ] def formula(tax_unit, period, parameters): @@ -19,8 +20,12 @@ def formula(tax_unit, period, parameters): federal_amt_income_less_exemptions = tax_unit( "amt_income_less_exemptions", period ) - # Line 2: Colorado additions (from DR 0104, lines 3-8) - co_additions = tax_unit("co_additions", period) + # Line 2: Colorado additions from DR 0104, lines 3 through 7 and 9. The + # state income tax addback (DR 0104 line 2) is left out because federal + # alternative minimum taxable income never deducted those taxes. + co_additions = tax_unit("co_additions", period) - tax_unit( + "co_state_addback", period + ) # Line 4: Colorado subtractions (excluding state income tax refund) co_subtractions = tax_unit("co_subtractions", period) # Line 5: Colorado AMTI From d4c759ea2d1ab384ad82d7db8db9ce573bb05d03 Mon Sep 17 00:00:00 2001 From: Max Ghenis Date: Sun, 11 Oct 2026 11:49:25 -0400 Subject: [PATCH 2/7] Move the Colorado AMT change to the federal AMTI PR Colorado AMTI starts from federal AMTI, and its refund subtraction must change together with the federal section 56(b)(1)(C) fix, so both Colorado AMT edits move there to keep the two PRs from conflicting. Co-Authored-By: Claude Opus 5.5 --- ...federal-deduction-addback-coordination.fixed.md | 2 +- .../amt/co_alternative_minimum_taxable_income.yaml | 14 -------------- .../amt/co_alternative_minimum_taxable_income.py | 9 ++------- 3 files changed, 3 insertions(+), 22 deletions(-) diff --git a/changelog.d/co-federal-deduction-addback-coordination.fixed.md b/changelog.d/co-federal-deduction-addback-coordination.fixed.md index 8ffbc5b25ce..f903b990200 100644 --- a/changelog.d/co-federal-deduction-addback-coordination.fixed.md +++ b/changelog.d/co-federal-deduction-addback-coordination.fixed.md @@ -1 +1 @@ -Reduce Colorado's federal deduction addback by the state income tax already added back, and leave that addback out of Colorado alternative minimum taxable income. +Reduce Colorado's federal deduction addback by the Schedule A state income tax already added back on DR 0104 line 2. diff --git a/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.yaml b/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.yaml index bee7f97946b..35a377bc3f2 100644 --- a/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.yaml +++ b/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.yaml @@ -31,17 +31,3 @@ output: # max(0, 0 + 0 - 50,000) = 0 co_alternative_minimum_taxable_income: 0 - -# DR 0104AMT (2025), line 2: the sum of DR 0104 lines 3 through 7 and 9, which -# leaves out the state income tax addback on DR 0104 line 2. -- name: CO AMTI leaves out the state income tax addback - period: 2025 - input: - amt_income_less_exemptions: 200_000 - co_additions: 10_000 - co_state_addback: 6_000 - co_subtractions: 5_000 - state_code: CO - output: - # 200,000 + (10,000 - 6,000) - 5,000 - co_alternative_minimum_taxable_income: 199_000 diff --git a/policyengine_us/variables/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.py b/policyengine_us/variables/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.py index 337e74f0244..99a985d0093 100644 --- a/policyengine_us/variables/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.py +++ b/policyengine_us/variables/gov/states/co/tax/income/amt/co_alternative_minimum_taxable_income.py @@ -11,7 +11,6 @@ class co_alternative_minimum_taxable_income(Variable): reference = [ "https://tax.colorado.gov/DR0104AMT", "https://law.justia.com/codes/colorado/2022/title-39/article-22/part-1/section-39-22-105/", - "https://tax.colorado.gov/sites/tax/files/documents/DR0104AMT_2025.pdf#page=1", ] def formula(tax_unit, period, parameters): @@ -20,12 +19,8 @@ def formula(tax_unit, period, parameters): federal_amt_income_less_exemptions = tax_unit( "amt_income_less_exemptions", period ) - # Line 2: Colorado additions from DR 0104, lines 3 through 7 and 9. The - # state income tax addback (DR 0104 line 2) is left out because federal - # alternative minimum taxable income never deducted those taxes. - co_additions = tax_unit("co_additions", period) - tax_unit( - "co_state_addback", period - ) + # Line 2: Colorado additions (from DR 0104, lines 3-8) + co_additions = tax_unit("co_additions", period) # Line 4: Colorado subtractions (excluding state income tax refund) co_subtractions = tax_unit("co_subtractions", period) # Line 5: Colorado AMTI From 731ce8e17e5b332ba892250cc87ddb1af144bfba Mon Sep 17 00:00:00 2001 From: Claude Date: Tue, 3 Nov 2026 23:01:48 +0000 Subject: [PATCH 3/7] Cite both Colorado addback rules and register the coordination reading The federal deductions addback is reduced by the state income tax already added back on DR 0104 line 2 under the (p) rule (2022), the (p.5) rule's paragraph (3)(a)(i) and the 2023 to 2025 booklets. The statute does not say how the additions coordinate, so record the gap-fill reading as a ruled source-conflict candidate. Drop the unverified Cornell link and keep the rule citation in a comment. Add two computed cases: a 2022 itemizer whose state income tax addback exceeds the excess over the limit (kills the subtract-after-the-floor mutant), and a 2025 standard-deduction filer with state withholding, whose addback stays at the standard deduction less the limit (kills dropping the itemizer guard in co_state_addback). Co-Authored-By: Claude Opus 5.5 Claude-Session: https://claude.ai/code/session_01LwQq6JCmk7C4FcYPH1cSS5 --- .../co_federal_deduction_addback.yaml | 55 ++++++++++++++++++- .../co_federal_deduction_addback.py | 14 +++-- source_conflicts/candidates.yaml | 47 ++++++++++++++++ 3 files changed, 108 insertions(+), 8 deletions(-) diff --git a/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/additions/federal_deduction/co_federal_deduction_addback.yaml b/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/additions/federal_deduction/co_federal_deduction_addback.yaml index 600921f941d..4fb1726a2a1 100644 --- a/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/additions/federal_deduction/co_federal_deduction_addback.yaml +++ b/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/additions/federal_deduction/co_federal_deduction_addback.yaml @@ -371,9 +371,10 @@ output: co_federal_deduction_addback: 1_000 -# Rule 39-22-104(3)(p)(3)(a)(i) and the DR 0104 line 4 instructions (2023 to -# 2025): the addback is reduced by the Schedule A state income tax already -# added back on DR 0104 line 2. +# Rule 39-22-104(3)(p), paragraph (3) (2022), Rule 39-22-104(3)(p.5), +# paragraph (3)(a)(i), and the DR 0104 line 4 instructions (2023 to 2025): the +# addback is reduced by the Schedule A state income tax already added back on +# DR 0104 line 2. The same reduction carries to 2026. - name: Case 36, 2025 single itemizer, addback reduced by the state income tax addback. period: 2025 input: @@ -425,3 +426,51 @@ output: # 20,000 - 1,000 - 5,000 co_federal_deduction_addback: 14_000 + +- name: Case 40, 2022 single itemizer, computed state income tax addback above the excess leaves no addback. + period: 2022 + input: + people: + head: + age: 45 + employment_income: 450_000 + real_estate_taxes: 2_000 + deductible_mortgage_interest: 25_000 + tax_units: + tax_unit: + members: [head] + state_withheld_income_tax: 8_000 + households: + household: + members: [head] + state_code: CO + output: + # SALT min(8,000 + 2,000, 10,000) + mortgage interest 25,000 + itemized_taxable_income_deductions: 35_000 + # min(8,000 state income tax, 35,000 - 12,950 standard deduction) + co_state_addback: 8_000 + # max(0, 35,000 - 30,000 - 8,000) + co_federal_deduction_addback: 0 + +- name: Case 41, 2025 single filer claiming the standard deduction with state withholding has no state income tax addback to subtract. + period: 2025 + input: + people: + head: + age: 45 + employment_income: 450_000 + tax_units: + tax_unit: + members: [head] + state_withheld_income_tax: 20_000 + tax_unit_itemizes: false + households: + household: + members: [head] + state_code: CO + output: + standard_deduction: 15_750 + # Only an itemizer adds back state income tax on DR 0104 line 2. + co_state_addback: 0 + # 15,750 - 12,000 + co_federal_deduction_addback: 3_750 diff --git a/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py b/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py index 9af141f36ec..4b30c808b45 100644 --- a/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py +++ b/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py @@ -17,8 +17,9 @@ class co_federal_deduction_addback(Variable): "https://tax.colorado.gov/sites/tax/files/documents/DR_104_Book_2022.pdf#page=5", # Individual Income Tax Guide - Part 3 Additions to Taxable Income - Federal itemized or standard deductions "https://tax.colorado.gov/individual-income-tax-guide", - # 1 CCR 201-2, Rule 39-22-104(3)(p)(3): coordination with other addbacks. - "https://www.law.cornell.edu/regulations/colorado/39-22-104(3-parens-p)", + # 1 CCR 201-2, Rule 39-22-104(3)(p), paragraph (3) (2022), and + # Rule 39-22-104(3)(p.5), paragraph (3)(a)(i) (2023 to 2025): + # coordination with other addbacks. Cited without a link. # DR 0104 line 4 instructions, 2023 to 2025. "https://tax.colorado.gov/sites/tax/files/documents/Book0104_2023.pdf#page=6", "https://tax.colorado.gov/sites/tax/files/documents/DR0104_book_2024.pdf#page=9", @@ -38,9 +39,12 @@ def formula(tax_unit, period, parameters): ) filing_status = tax_unit("filing_status", period) exemption = p.exemption[filing_status] - # Rule 39-22-104(3)(p)(3)(a)(i) reduces this addition by the state - # income tax already added back under C.R.S. 39-22-104(3)(d)(I) - # (DR 0104 line 2), but not by a share of state income tax deducted by a + # Rule 39-22-104(3)(p), paragraph (3) (2022), Rule 39-22-104(3)(p.5), + # paragraph (3)(a)(i), and the DR 0104 line 4 instructions (2023 to + # 2025) reduce this addition by the state income tax already added back + # under C.R.S. 39-22-104(3)(d)(I) (DR 0104 line 2), so the same dollars + # are not added back twice. The reduction applies from 2022 on, 2026 + # included. It excludes a share of state income tax deducted by a # partnership or S corporation, which co_state_addback does not include. state_income_tax_addback = tax_unit("co_state_addback", period) return max_(deductions - exemption - state_income_tax_addback, 0) diff --git a/source_conflicts/candidates.yaml b/source_conflicts/candidates.yaml index 6b1dbcbedc4..63b3ac047f0 100644 --- a/source_conflicts/candidates.yaml +++ b/source_conflicts/candidates.yaml @@ -1586,6 +1586,53 @@ candidates: prs: [] state: unreviewed note: Verify the guide's year coverage and the model's comparison operator. +- id: us-co:federal-deduction-addback-net-of-state-tax-addback + program: income-tax + years: + from: 2022 + type: tax + question: Is Colorado's high-income federal deductions addback reduced by the state income tax already added back + under C.R.S. 39-22-104(3)(d)(I), or are the two additions made separately? + sources: + - kind: statute + citation: C.R.S. 39-22-104(3)(d)(I), (3)(p), (3)(p.5) and (3)(p.7) + url: https://olls.info/crs/crs2025-title-39.pdf#page=382 + - kind: regulation + citation: 1 CCR 201-2, Rule 39-22-104(3)(p), paragraph (3) + url: null + - kind: regulation + citation: 1 CCR 201-2, Rule 39-22-104(3)(p.5), paragraph (3)(a)(i) + url: null + - kind: instructions + citation: 2023 DR 0104 booklet, line 4 + url: https://tax.colorado.gov/sites/tax/files/documents/Book0104_2023.pdf#page=6 + - kind: instructions + citation: 2024 DR 0104 booklet, line 4 + url: https://tax.colorado.gov/sites/tax/files/documents/DR0104_book_2024.pdf#page=9 + - kind: instructions + citation: 2025 DR 0104 booklet, line 4 + url: https://tax.colorado.gov/sites/tax/files/documents/Book104_2025.pdf#page=9 + - kind: instructions + citation: 2022 DR 0104 booklet, line 4 + url: https://tax.colorado.gov/sites/tax/files/documents/DR_104_Book_2022.pdf#page=6 + readings: + statute: Read literally, (3)(d)(I) and (3)(p), (p.5) or (p.7) are two separate additions, so state income tax + deducted on Schedule A is added back once on DR 0104 line 2 and again inside the line 4 excess. + other: The two rules and the 2023 to 2025 booklets reduce the line 4 addition by the state income tax already + added back on line 2, excluding a share of state income tax deducted by a partnership or S corporation. + example: A 2025 single itemizer with $20,000 of itemized deductions, $5,000 of them state income tax added back on + line 2, adds back $3,000 on line 4 under the net reading and $8,000 under the literal one. + pe_us: + follows: gap-fill + code: + - policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py + prs: + - https://github.com/PolicyEngine/policyengine-us/pull/10094 + state: ruled + note: The statute does not say how the additions coordinate; the code nets them in every year from 2022, following + the rules, the booklets and the canon against counting a dollar twice. The 2022 booklet subtracts only the $30,000 + or $60,000 limit, with no reduction for state income tax, and no rule or booklet yet covers 2026, where the same + reading carries to (p.7). - id: us-co:joint-childless-eitc-dependent-question program: income-tax years: From 56c0f4e8c2e3623e028e6b55828a6f1a371c0e80 Mon Sep 17 00:00:00 2001 From: Claude Date: Wed, 4 Nov 2026 15:16:16 +0000 Subject: [PATCH 4/7] Give the Colorado register item an example the model reproduces The old example (a $20,000 itemizer with $5,000 of state income tax added back on line 2) can't happen in the model: the line 2 worksheet caps that addback at itemized deductions less the standard deduction, 20,000 - 15,750 = 4,250. The new household ($450,000 wages, $5,000 withholding, $5,000 real estate tax, $20,000 mortgage interest) gives itemized deductions of 30,000, a line 2 addback of 5,000 and a line 4 addback of 13,000 at this head, and 18,000 on main, which takes the literal reading. Claude-Session: https://claude.ai/code/session_01QpcqEDZvsBp213aZFaj3ty Co-Authored-By: Claude Opus 5.5 --- source_conflicts/candidates.yaml | 4 ++-- 1 file changed, 2 insertions(+), 2 deletions(-) diff --git a/source_conflicts/candidates.yaml b/source_conflicts/candidates.yaml index 63b3ac047f0..030fdeccb91 100644 --- a/source_conflicts/candidates.yaml +++ b/source_conflicts/candidates.yaml @@ -1620,8 +1620,8 @@ candidates: deducted on Schedule A is added back once on DR 0104 line 2 and again inside the line 4 excess. other: The two rules and the 2023 to 2025 booklets reduce the line 4 addition by the state income tax already added back on line 2, excluding a share of state income tax deducted by a partnership or S corporation. - example: A 2025 single itemizer with $20,000 of itemized deductions, $5,000 of them state income tax added back on - line 2, adds back $3,000 on line 4 under the net reading and $8,000 under the literal one. + example: A 2025 single itemizer with $30,000 of itemized deductions, including $5,000 of state income tax added back + on line 2, adds back $13,000 on line 4 under the net reading and $18,000 under the literal one. pe_us: follows: gap-fill code: From 33f710ee90f7c2c661091a2cca76416fab7ffe8b Mon Sep 17 00:00:00 2001 From: Claude Date: Wed, 4 Nov 2026 15:16:17 +0000 Subject: [PATCH 5/7] Reach the non-itemizer branch of the Colorado addback without an input Case 41 sets tax_unit_itemizes: false as an input. Case 42 gets there through the model's own choice: in 2026 the section 68 limitation cuts a $1,000,000 earner's itemized deductions from 16,500 to 15,608, below the 16,100 standard deduction, so co_state_addback is 0 and line 4 is 16,100 - 1,000 = 15,100. With the federal_itemizer factor dropped from co_state_addback, the case fails (400 against 0), as Case 41 does. Claude-Session: https://claude.ai/code/session_01QpcqEDZvsBp213aZFaj3ty Co-Authored-By: Claude Opus 5.5 --- .../co_federal_deduction_addback.yaml | 25 +++++++++++++++++++ 1 file changed, 25 insertions(+) diff --git a/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/additions/federal_deduction/co_federal_deduction_addback.yaml b/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/additions/federal_deduction/co_federal_deduction_addback.yaml index 4fb1726a2a1..c4fa56a3ca3 100644 --- a/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/additions/federal_deduction/co_federal_deduction_addback.yaml +++ b/policyengine_us/tests/policy/baseline/gov/states/co/tax/income/additions/federal_deduction/co_federal_deduction_addback.yaml @@ -474,3 +474,28 @@ co_state_addback: 0 # 15,750 - 12,000 co_federal_deduction_addback: 3_750 + +- name: Case 42, 2026 single filer whose section 68 limitation makes the standard deduction larger has no state income tax addback to subtract. + period: 2026 + input: + people: + head: + age: 45 + employment_income: 1_000_000 + deductible_mortgage_interest: 6_500 + tax_units: + tax_unit: + members: [head] + state_withheld_income_tax: 10_000 + households: + household: + members: [head] + state_code: CO + output: + # SALT 10,000 + mortgage interest 6,500 = 16,500 before the limitation, + # above the 16,100 standard deduction; the limitation leaves 15,608, so + # the unit takes the standard deduction. + tax_unit_itemizes: false + co_state_addback: 0 + # 16,100 - 1,000 + co_federal_deduction_addback: 15_100 From ab98604b2c3a82e4fde6f2de96a70e0511b94a17 Mon Sep 17 00:00:00 2001 From: Max Ghenis Date: Wed, 4 Nov 2026 12:56:42 -0500 Subject: [PATCH 6/7] Link the two 1 CCR 201-2 rules behind Colorado's addback coordination Rule 39-22-104(3)(p) sits on page 12 of the Secretary of State's PDF (rule version 12424), and Rule 39-22-104(3)(p.5) on page 13. Co-Authored-By: Claude Opus 5.5 --- .../federal_deductions/co_federal_deduction_addback.py | 4 +++- source_conflicts/candidates.yaml | 4 ++-- 2 files changed, 5 insertions(+), 3 deletions(-) diff --git a/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py b/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py index 4b30c808b45..6bddb358ad0 100644 --- a/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py +++ b/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py @@ -19,7 +19,9 @@ class co_federal_deduction_addback(Variable): "https://tax.colorado.gov/individual-income-tax-guide", # 1 CCR 201-2, Rule 39-22-104(3)(p), paragraph (3) (2022), and # Rule 39-22-104(3)(p.5), paragraph (3)(a)(i) (2023 to 2025): - # coordination with other addbacks. Cited without a link. + # coordination with other addbacks. + "https://www.sos.state.co.us/CCR/GenerateRulePdf.do?ruleVersionId=12424&fileName=1%20CCR%20201-2#page=12", + "https://www.sos.state.co.us/CCR/GenerateRulePdf.do?ruleVersionId=12424&fileName=1%20CCR%20201-2#page=13", # DR 0104 line 4 instructions, 2023 to 2025. "https://tax.colorado.gov/sites/tax/files/documents/Book0104_2023.pdf#page=6", "https://tax.colorado.gov/sites/tax/files/documents/DR0104_book_2024.pdf#page=9", diff --git a/source_conflicts/candidates.yaml b/source_conflicts/candidates.yaml index 030fdeccb91..873a6f7f864 100644 --- a/source_conflicts/candidates.yaml +++ b/source_conflicts/candidates.yaml @@ -1599,10 +1599,10 @@ candidates: url: https://olls.info/crs/crs2025-title-39.pdf#page=382 - kind: regulation citation: 1 CCR 201-2, Rule 39-22-104(3)(p), paragraph (3) - url: null + url: https://www.sos.state.co.us/CCR/GenerateRulePdf.do?ruleVersionId=12424&fileName=1%20CCR%20201-2#page=12 - kind: regulation citation: 1 CCR 201-2, Rule 39-22-104(3)(p.5), paragraph (3)(a)(i) - url: null + url: https://www.sos.state.co.us/CCR/GenerateRulePdf.do?ruleVersionId=12424&fileName=1%20CCR%20201-2#page=13 - kind: instructions citation: 2023 DR 0104 booklet, line 4 url: https://tax.colorado.gov/sites/tax/files/documents/Book0104_2023.pdf#page=6 From d16965a3426695baa8776350bad2ad9b432188fc Mon Sep 17 00:00:00 2001 From: Claude Date: Thu, 5 Nov 2026 00:42:14 +0000 Subject: [PATCH 7/7] Cite the 1 CCR 201-2 PDF once in Colorado's federal deduction addback The (3)(p) and (p.5) rules sit on pages 12 and 13 of the same rule PDF. CLAUDE.md treats URLs that differ only by #page= as one source, so keep the #page=12 entry and note the page range in a comment. Co-Authored-By: Claude Opus 5.5 Claude-Session: https://claude.ai/code/session_01LwQq6HWtPqg7fKcLTqL3ef --- .../federal_deductions/co_federal_deduction_addback.py | 2 +- 1 file changed, 1 insertion(+), 1 deletion(-) diff --git a/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py b/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py index 6bddb358ad0..6f7695db9ae 100644 --- a/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py +++ b/policyengine_us/variables/gov/states/co/tax/income/additions/federal_deductions/co_federal_deduction_addback.py @@ -20,8 +20,8 @@ class co_federal_deduction_addback(Variable): # 1 CCR 201-2, Rule 39-22-104(3)(p), paragraph (3) (2022), and # Rule 39-22-104(3)(p.5), paragraph (3)(a)(i) (2023 to 2025): # coordination with other addbacks. + # PDF pages 12-13 "https://www.sos.state.co.us/CCR/GenerateRulePdf.do?ruleVersionId=12424&fileName=1%20CCR%20201-2#page=12", - "https://www.sos.state.co.us/CCR/GenerateRulePdf.do?ruleVersionId=12424&fileName=1%20CCR%20201-2#page=13", # DR 0104 line 4 instructions, 2023 to 2025. "https://tax.colorado.gov/sites/tax/files/documents/Book0104_2023.pdf#page=6", "https://tax.colorado.gov/sites/tax/files/documents/DR0104_book_2024.pdf#page=9",