Fix Vermont student loan interest and CTC phase-out, Utah's at-home parent credit and Wisconsin's homestead claimant

changelog.d/vt-ut-wi-statutory-fixes.fixed.md

@@ -0,0 +1 @@
+Subtract only the Vermont student loan interest not already deducted federally, from 2022 and within the income limits; phase out Vermont's child tax credit per child; pay Utah's at-home parent credit once per qualifying child per return; and test the Wisconsin homestead credit's age, earned income, disability and dependency conditions on the claimant.

policyengine_us/parameters/gov/states/vt/tax/income/agi/student_loan_interest/in_effect.yaml

@@ -0,0 +1,13 @@
+description: Vermont subtracts student loan interest not deducted federally if this is true.
+values:
+  0000-01-01: false
+  2022-01-01: true
+metadata:
+  unit: bool
+  period: year
+  label: Vermont student loan interest subtraction in effect
+  reference:
+    - title: "2022 Act 138, Sec. 5 and Sec. 13 (effective retroactively on January 1, 2022) #page 4-5,15"
+      href: https://legislature.vermont.gov/Documents/2022/Docs/ACTS/ACT138/ACT138%20As%20Enacted.pdf#page=4
+    - title: 32 V.S.A. 5811(21)(B)(vi)
+      href: https://legislature.vermont.gov/statutes/section/32/151/05811

policyengine_us/parameters/gov/states/vt/tax/income/agi/student_loan_interest/income_limit.yaml

@@ -0,0 +1,26 @@
+description: Vermont allows the student loan interest subtraction only to filers with federal adjusted gross income at or below this amount, by filing status.
+metadata:
+  propagate_metadata_to_children: true
+  unit: currency-USD
+  period: year
+  label: Vermont student loan interest subtraction income limit
+  breakdown:
+    - filing_status
+  reference:
+    - title: 32 V.S.A. 5811(29)(B)
+      href: https://legislature.vermont.gov/statutes/section/32/151/05811
+    - title: "2022 Act 138, Sec. 5 and Sec. 13 (effective retroactively on January 1, 2022) #page 4-5,15"
+      href: https://legislature.vermont.gov/Documents/2022/Docs/ACTS/ACT138/ACT138%20As%20Enacted.pdf#page=4
+    - title: 2025 Vermont income tax booklet, Schedule IN-112 line 16c
+      href: https://taxsim.nber.org/historical_state_tax_forms/VT/2025/Income-Booklet-2025.pdf#page=33
+SINGLE:
+  2022-01-01: 120_000
+HEAD_OF_HOUSEHOLD:
+  2022-01-01: 120_000
+SEPARATE:
+  2022-01-01: 120_000
+SURVIVING_SPOUSE:
+  # IN-112 line 16c: "All other filers, if AGI is greater than $120,000, enter -0-."
+  2022-01-01: 120_000
+JOINT:
+  2022-01-01: 200_000

policyengine_us/parameters/gov/states/vt/tax/income/agi/subtractions.yaml

@@ -3,14 +3,24 @@ values:
   2021-01-01:
     - us_govt_interest
     - vt_medical_expense_deduction
-    - student_loan_interest
+    - vt_capital_gains_exclusion
+    - vt_retirement_income_exemption
+    - salt_refund_income
+  # 2022 Act 138 added the student loan interest subtraction from 2022
+  # (32 V.S.A. 5811(21)(B)(vi)); the 2021 Schedule IN-112 has no such line.
+  2022-01-01:
+    - us_govt_interest
+    - vt_medical_expense_deduction
+    - vt_student_loan_interest_subtraction
     - vt_capital_gains_exclusion
     - vt_retirement_income_exemption
     - salt_refund_income
 metadata:
   unit: list
   label: Vermont subtractions
   reference:
+    - title: 2025 SCHEDULE IN-112 # Line 16a-16c, student loan interest
+      href: https://taxsim.nber.org/historical_state_tax_forms/VT/2025/Income-Booklet-2025.pdf#page=23
     - title: 2024 SCHEDULE IN-112 # PART 1 SUBTRACTIONS FROM FEDERAL ADJUSTED GROSS INCOME
       href: https://tax.vermont.gov/sites/tax/files/documents/IN-112-2024.pdf#page=1
     - title: 2023 SCHEDULE IN-112 # PART 1 SUBTRACTIONS FROM FEDERAL ADJUSTED GROSS INCOME

policyengine_us/tests/core/test_vt_ut_wi_statutory_invariants.py

@@ -0,0 +1,221 @@
+"""Invariants of four Vermont, Utah and Wisconsin rules.
+
+1. Vermont student loan interest (32 V.S.A. 5811(21)(B)(vi), (29); IN-112
+   line 16): from 2022, the state subtraction plus the federal deduction equals
+   the filers' interest paid when AGI is within the limit, and the subtraction
+   is zero above the limit, in 2021, and never negative.
+2. Vermont child tax credit (5830f(b)): the phase-out applies per child, so the
+   credit for n young children is n times the credit for one at the same AGI.
+3. Utah at-home parent credit (59-10-1005(2)): a second spouse who also
+   qualifies as an at-home parent does not change the credit.
+4. Wisconsin homestead eligibility: the same under either head/spouse
+   labelling, and marking a spouse as claimed never makes a return eligible.
+
+Each check is one vectorized simulation over Hypothesis-drawn households.
+"""
+
+import numpy as np
+from hypothesis import HealthCheck, given, settings
+from hypothesis import strategies as st
+
+from policyengine_us import Simulation
+
+SETTINGS = settings(
+    max_examples=3,
+    deadline=None,
+    derandomize=True,
+    suppress_health_check=[HealthCheck.too_slow, HealthCheck.data_too_large],
+)
+
+
+def _situation(units, year, state):
+    """units: list of lists of person dicts; the first person is the head,
+    the second (if flagged) the spouse, the rest dependents."""
+    people, groups = (
+        {},
+        {
+            k: {}
+            for k in (
+                "tax_units",
+                "spm_units",
+                "families",
+                "marital_units",
+                "households",
+            )
+        },
+    )
+    for i, unit in enumerate(units):
+        members = []
+        for j, attrs in enumerate(unit):
+            name = f"p_{i}_{j}"
+            people[name] = {k: {year: v} for k, v in attrs.items()}
+            members.append(name)
+        filers = [
+            m
+            for m, a in zip(members, unit)
+            if a.get("is_tax_unit_head") or a.get("is_tax_unit_spouse")
+        ]
+        groups["marital_units"][f"m_{i}"] = {"members": filers or members[:1]}
+        for j, m in enumerate(members):
+            if m not in (filers or members[:1]):
+                groups["marital_units"][f"m_{i}_{j}"] = {"members": [m]}
+        for key, prefix in (("tax_units", "t"), ("spm_units", "s"), ("families", "f")):
+            groups[key][f"{prefix}_{i}"] = {"members": members}
+        groups["households"][f"h_{i}"] = {
+            "members": members,
+            "state_code": {year: state},
+        }
+    return {"people": people, **groups}
+
+
+def _calc(sim, name, year):
+    return np.asarray(sim.calculate(name, year), dtype=float)
+
+
+@st.composite
+def borrowers(draw):
+    joint = draw(st.booleans())
+    head = {
+        "age": 30,
+        "is_tax_unit_head": True,
+        "employment_income": float(draw(st.integers(0, 250_000))),
+        "student_loan_interest": float(draw(st.integers(0, 6_000))),
+    }
+    unit = [head]
+    if joint:
+        unit.append(
+            {
+                "age": 30,
+                "is_tax_unit_spouse": True,
+                "employment_income": float(draw(st.integers(0, 60_000))),
+                "student_loan_interest": float(draw(st.integers(0, 3_000))),
+            }
+        )
+    return unit
+
+
+@SETTINGS
+@given(
+    st.sampled_from([2021, 2022, 2024, 2026]),
+    st.lists(borrowers(), min_size=8, max_size=20),
+)
+def test_vt_student_loan_subtraction_completes_the_federal_deduction(year, units):
+    sim = Simulation(situation=_situation(units, year, "VT"))
+    paid = np.array([sum(p["student_loan_interest"] for p in u) for u in units])
+    federal = np.asarray(
+        sim.calculate("student_loan_interest_ald", year, map_to="tax_unit")
+    )
+    sub = _calc(sim, "vt_student_loan_interest_subtraction", year)
+    agi = _calc(sim, "adjusted_gross_income", year)
+    joint = np.array([len(u) == 2 for u in units])
+    limit = np.where(joint, 200_000, 120_000)
+    assert (sub >= 0).all()
+    if year < 2022:
+        assert not sub.any()
+        return
+    within = agi <= limit
+    np.testing.assert_allclose(sub[within] + federal[within], paid[within], atol=0.01)
+    assert not sub[~within].any()
+
+
+@SETTINGS
+@given(
+    st.sampled_from([2023, 2025, 2026]),
+    st.lists(st.integers(0, 260_000), min_size=6, max_size=15),
+)
+def test_vt_ctc_phase_out_is_per_child(year, agis):
+    units = []
+    for agi in agis:
+        for n in (1, 3):
+            units.append(
+                [{"age": 35, "is_tax_unit_head": True}] + [{"age": 2} for _ in range(n)]
+            )
+    situation = _situation(units, year, "VT")
+    for i, agi in enumerate(np.repeat(agis, 2)):
+        situation["tax_units"][f"t_{i}"]["adjusted_gross_income"] = {year: float(agi)}
+    sim = Simulation(situation=situation)
+    ctc = _calc(sim, "vt_ctc", year).reshape(-1, 2)
+    np.testing.assert_allclose(ctc[:, 1], 3 * ctc[:, 0], atol=0.01)
+
+
+@SETTINGS
+@given(
+    st.sampled_from([2022, 2024, 2025, 2026]),
+    st.lists(
+        st.tuples(st.integers(0, 3_000), st.integers(0, 3_000), st.integers(1, 3)),
+        min_size=6,
+        max_size=15,
+    ),
+)
+def test_ut_at_home_parent_credit_once_per_return(year, draws):
+    units = []
+    for head_earnings, spouse_earnings, newborns in draws:
+        kids = [{"age": 0} for _ in range(newborns)]
+        # The spouse qualifies in the first copy (earnings <= $3,000) and not
+        # in the second ($10,000), with total income kept under $50,000.
+        for spouse_pay in (float(spouse_earnings), 10_000.0):
+            units.append(
+                [
+                    {
+                        "age": 30,
+                        "is_tax_unit_head": True,
+                        "employment_income": float(head_earnings),
+                    },
+                    {
+                        "age": 30,
+                        "is_tax_unit_spouse": True,
+                        "employment_income": spouse_pay,
+                    },
+                ]
+                + kids
+            )
+    sim = Simulation(situation=_situation(units, year, "UT"))
+    credit = _calc(sim, "ut_at_home_parent_credit_potential", year).reshape(-1, 2)
+    np.testing.assert_allclose(credit[:, 0], credit[:, 1], atol=0.01)
+
+
+@st.composite
+def homestead_couples(draw):
+    def adult():
+        return {
+            "age": draw(st.integers(16, 80)),
+            "is_disabled": draw(st.booleans()),
+            "employment_income": float(draw(st.sampled_from([0, 0, 500, 3_000]))),
+            "real_estate_taxes": float(draw(st.integers(0, 1_500))),
+        }
+
+    return adult(), adult()
+
+
+@SETTINGS
+@given(
+    st.sampled_from([2021, 2023, 2025]),
+    st.lists(homestead_couples(), min_size=6, max_size=12),
+)
+def test_wi_homestead_eligibility_is_label_free_and_monotone(year, couples):
+    # Per couple: labels (a head, b head) x claims (none, a, b, both).
+    units = []
+    for a, b in couples:
+        for claims in [(False, False), (True, False), (False, True), (True, True)]:
+            for a_is_head in (True, False):
+                pa = {**a, "claimed_as_dependent_on_another_return": claims[0]}
+                pb = {**b, "claimed_as_dependent_on_another_return": claims[1]}
+                first, second = (pa, pb) if a_is_head else (pb, pa)
+                units.append(
+                    [
+                        {**first, "is_tax_unit_head": True},
+                        {**second, "is_tax_unit_spouse": True},
+                    ]
+                )
+    sim = Simulation(situation=_situation(units, year, "WI"))
+    eligible = _calc(sim, "wi_homestead_eligible", year).reshape(-1, 4, 2)
+    np.testing.assert_array_equal(eligible[:, :, 0], eligible[:, :, 1])
+    e = eligible[:, :, 0]
+    none, a_claimed, b_claimed, both = e.T
+    for more, fewer in (
+        (a_claimed, none),
+        (b_claimed, none),
+        (both, a_claimed),
+        (both, b_claimed),
+    ):
+        assert not (more > fewer).any()

policyengine_us/tests/policy/baseline/gov/states/ut/tax/income/credits/ut_at_home_parent_credit.yaml

@@ -55,7 +55,7 @@
         state_code: UT
   output:
     ut_at_home_parent_credit: 0
-- name: 2 eligible parents with 1 child
+- name: 1 eligible parent with 2 children
   period: 2022
   input:
     people:
@@ -123,4 +123,35 @@
         - person4
         state_code: UT
   output:
-    ut_at_home_parent_credit: 400
+    # Utah Code 59-10-1005(2): $100 for each qualifying child when the claimant
+    # or a joint-filing spouse is an at-home parent, once per return.
+    ut_at_home_parent_credit: 200
+
+- name: 2025 two at-home parents with one newborn get one credit for the child
+  period: 2025
+  input:
+    people:
+      head:
+        age: 30
+        employment_income: 2_000
+      spouse:
+        age: 30
+        employment_income: 1_000
+        is_tax_unit_spouse: true
+      newborn:
+        age: 0
+    tax_units:
+      tax_unit:
+        members: [head, spouse, newborn]
+        filing_status: JOINT
+        ut_income_tax_before_non_refundable_credits: 1000000
+    households:
+      household:
+        members: [head, spouse, newborn]
+        state_code: UT
+  output:
+    # Utah Code 59-10-1005(2): $100 for each qualifying child if the claimant
+    # or a joint-filing spouse is an at-home parent; both spouses earning
+    # $3,000 or less does not double it.
+    ut_at_home_parent_credit_potential: 100
+    ut_at_home_parent_credit: 100