Leave dependents' income out of Wisconsin homestead credit household income

changelog.d/wi-homestead-dependent-income.fixed.md

@@ -0,0 +1 @@
+Leave a tax unit dependent's income, such as a child's Social Security, SSI, unemployment compensation or capital gains, and a dependent's rent and property taxes out of the Wisconsin homestead credit, and test each spouse separately as the claimant for its age and earned income requirements. Preserve qualifying negative net Social Security repayments in household income.

policyengine_us/parameters/gov/states/wi/tax/income/credits/homestead/income/sources.yaml

@@ -12,7 +12,9 @@ values:
     - adjusted_gross_income
     # additional homestead income sources:
     - tax_exempt_interest_income
-    - tax_exempt_social_security
+    # The household is the claimant and spouse (Wis. Stat. 71.52(4)), so
+    # this leaves out a dependent's benefits, unlike tax_exempt_social_security.
+    - filer_tax_exempt_social_security
     - tax_exempt_pension_income
     - tax_exempt_unemployment_compensation
     # cash transfer income sources:

policyengine_us/tests/policy/baseline/gov/states/wi/tax/income/wi_homestead_credit.yaml

@@ -41,3 +41,35 @@
     state_code: WI
   output:
     wi_homestead_credit: 0
+
+- name: Case 5, a dependent grandchild's survivor benefits do not reduce the claimant's credit.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 70
+        social_security_retirement: 18_000
+        taxable_pension_income: 6_000
+        rent: 9_000
+      person2:
+        age: 17
+        is_tax_unit_dependent: true
+        social_security_survivors: 12_000
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: WI
+  output:
+    # Household income 23,500 (6,000 + 18,000 - 500), without the
+    # grandchild's 12,000; it is under the 24,680 limit.
+    wi_homestead_income: 23_500
+    wi_homestead_eligible: true
+    # Rent with heat included: 9,000 x 20% = 1,800, capped at 1,460.
+    wi_homestead_property_tax: 1_800
+    # (1,460 - (23,500 - 8,060) x 8.785%) x 80% = (1,460 - 1,356.40) x 80%.
+    # Schedule H's Tables A and B round to bands and give 84.
+    wi_homestead_credit: 82.88

policyengine_us/tests/policy/baseline/gov/states/wi/tax/income/wi_homestead_disqualified_losses.yaml

@@ -12,7 +12,7 @@
     tax_units:
       tax_unit:
         members: [head]
-        loss_limited_net_capital_gains: -3_000 # line 3
+        filer_loss_limited_net_capital_gains: -3_000 # line 3
     households:
       household:
         members: [head]
@@ -156,7 +156,7 @@
     tax_units:
       tax_unit:
         members: [head, child]
-        loss_limited_net_capital_gains: 0
+        filer_loss_limited_net_capital_gains: 0
     households:
       household:
         members: [head, child]

policyengine_us/tests/policy/baseline/gov/states/wi/tax/income/wi_homestead_eligible.yaml

@@ -95,3 +95,211 @@
     state_code: WI
   output:
     wi_homestead_eligible: false
+
+# The claimant must have their own earned income; either spouse may be the
+# claimant (2024 Schedule H instructions, page 10). Unemployment compensation
+# is not earned income (page 7), and a dependent's wages do not qualify them.
+
+- name: Case 8, a dependent's wages do not meet the claimant's earned income test.
+  period: 2024
+  input:
+    people:
+      person1:
+        age: 40
+        unemployment_compensation: 6_000
+      person2:
+        age: 17
+        is_tax_unit_dependent: true
+        employment_income: 4_000
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: WI
+  output:
+    wi_homestead_eligible: false
+
+- name: Case 9, the claimant's own wages meet the earned income test.
+  period: 2024
+  input:
+    people:
+      person1:
+        age: 40
+        employment_income: 4_000
+      person2:
+        age: 17
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: WI
+  output:
+    wi_homestead_eligible: true
+
+# Either spouse can be the claimant, who must be 18 or older and 62 or older,
+# disabled or have their own earned income (2024 Schedule H instructions,
+# pages 4 and 10; Wis. Stat. 71.53(2)(c), 71.54(1)(dm)-(gm)).
+
+- name: Case 10, one spouse's wages qualify even when the other has a larger self-employment loss.
+  period: 2024
+  input:
+    people:
+      person1:
+        age: 40
+        employment_income: 5_000
+      person2:
+        age: 40
+        self_employment_income: -8_000
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: WI
+  output:
+    wi_homestead_eligible: true
+
+- name: Case 11, the earner must also be 18 or older.
+  period: 2024
+  input:
+    people:
+      person1:
+        age: 17
+        employment_income: 6_000
+        is_tax_unit_head: true
+      person2:
+        age: 19
+        is_tax_unit_spouse: true
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: WI
+  output:
+    wi_homestead_eligible: false
+
+# Only one spouse needs earned income, and that spouse must be the claimant
+# (2024 Schedule H instructions, page 10). Either tax-unit role can qualify.
+
+- name: Case 12, only the spouse earns and can be the claimant.
+  period: 2024
+  input:
+    people:
+      person1:
+        age: 40
+        is_tax_unit_head: true
+        ssi: 0
+      person2:
+        age: 38
+        employment_income: 6_000
+        is_tax_unit_spouse: true
+        ssi: 0
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    spm_units:
+      spm_unit:
+        members: [person1, person2]
+        tanf: 0
+    households:
+      household:
+        members: [person1, person2]
+        state_code: WI
+  output:
+    wi_homestead_income: 6_000
+    wi_homestead_eligible: true
+
+- name: Case 13, the same earning spouse can be labeled as the head.
+  period: 2024
+  input:
+    people:
+      person1:
+        age: 40
+        is_tax_unit_spouse: true
+        ssi: 0
+      person2:
+        age: 38
+        employment_income: 6_000
+        is_tax_unit_head: true
+        ssi: 0
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    spm_units:
+      spm_unit:
+        members: [person1, person2]
+        tanf: 0
+    households:
+      household:
+        members: [person1, person2]
+        state_code: WI
+  output:
+    wi_homestead_income: 6_000
+    wi_homestead_eligible: true
+
+# The person meeting the age-62 condition can be the claimant (2024
+# Schedule H instructions, page 4), whichever tax-unit role they hold.
+
+- name: Case 14, only the spouse is 65 and can be the claimant.
+  period: 2024
+  input:
+    people:
+      person1:
+        age: 50
+        is_tax_unit_head: true
+        ssi: 0
+      person2:
+        age: 65
+        social_security_retirement: 9_000
+        is_tax_unit_spouse: true
+        ssi: 0
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    spm_units:
+      spm_unit:
+        members: [person1, person2]
+        tanf: 0
+    households:
+      household:
+        members: [person1, person2]
+        state_code: WI
+  output:
+    wi_homestead_income: 9_000
+    wi_homestead_eligible: true
+
+- name: Case 15, the same older spouse can be labeled as the head.
+  period: 2024
+  input:
+    people:
+      person1:
+        age: 50
+        is_tax_unit_spouse: true
+        ssi: 0
+      person2:
+        age: 65
+        social_security_retirement: 9_000
+        is_tax_unit_head: true
+        ssi: 0
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    spm_units:
+      spm_unit:
+        members: [person1, person2]
+        tanf: 0
+    households:
+      household:
+        members: [person1, person2]
+        state_code: WI
+  output:
+    wi_homestead_income: 9_000
+    wi_homestead_eligible: true