diff --git a/changelog.d/me-fairness-credit-odc-dependents.fixed.md b/changelog.d/me-fairness-credit-odc-dependents.fixed.md new file mode 100644 index 00000000000..f453cdd17e3 --- /dev/null +++ b/changelog.d/me-fairness-credit-odc-dependents.fixed.md @@ -0,0 +1 @@ +Count dependents who get the federal credit for other dependents, not only Child Tax Credit children, for the Maine sales tax and property tax fairness credits. diff --git a/policyengine_us/tests/policy/baseline/gov/states/me/tax/income/credits/fairness/me_fairness_credit_qualifying_children.yaml b/policyengine_us/tests/policy/baseline/gov/states/me/tax/income/credits/fairness/me_fairness_credit_qualifying_children.yaml index e9507a009cf..55fe4b14c1d 100644 --- a/policyengine_us/tests/policy/baseline/gov/states/me/tax/income/credits/fairness/me_fairness_credit_qualifying_children.yaml +++ b/policyengine_us/tests/policy/baseline/gov/states/me/tax/income/credits/fairness/me_fairness_credit_qualifying_children.yaml @@ -1,8 +1,10 @@ # 36 MRSA 5213-A(1)(A-1)(2) and 5219-KK(1)(A-1)(2)-(3) count each "qualifying child # or dependent" for whom the filer can claim the federal credit under section 24, -# which includes the credit for other dependents. A child whose filer fails the -# Child Tax Credit SSN rule gets that credit (IRC 24(h)(4)(C)) if the filer has an -# SSN or ITIN, so the child still counts (issue #9403). +# which includes the credit for other dependents. Form 1040ME line 13a counts each +# dependent for the Child Tax Credit or the credit for other dependents. A child +# whose filer fails the Child Tax Credit SSN rule gets that credit (IRC 24(h)(4)(C)) +# if the filer has an SSN or ITIN, so the child still counts (issue #9403). Older +# dependents and children without an SSN count when they have a TIN. - name: Maine counts the child of a joint return where neither spouse has an SSN in 2025 period: 2025 input: @@ -86,3 +88,180 @@ ctc_qualifying_children: 1 me_fairness_credit_qualifying_children: 1 me_sales_tax_fairness_credit: 250 + +- name: Maine counts a 17-year-old dependent who gets the credit for other dependents in 2025 + period: 2025 + input: + people: + head: + age: 45 + spouse: + age: 45 + child: + age: 17 + is_tax_unit_dependent: true + tax_units: + tax_unit: + members: [head, spouse, child] + filing_status: JOINT + me_sales_and_property_tax_fairness_credit_income: 10_000 + households: + household: + members: [head, spouse, child] + state_code: ME + output: + ctc_qualifying_children: 0 + me_fairness_credit_qualifying_children: 1 + # 2025 Schedule PTFC/STFC line 8 table, joint, line 13a is 1: $4,050. + me_property_tax_fairness_credit_benefit_base: 4_050 + # 2025 Schedule PTFC/STFC line 17 table, joint, $0-$50,950, line 13a is 1: $250. + me_sales_tax_fairness_credit: 250 + +- name: Maine counts a child with an ITIN but no SSN in 2025 + # IRC 24(h)(7) denies the Child Tax Credit; IRC 24(h)(4)(C) allows the credit for + # other dependents. + period: 2025 + input: + people: + head: + age: 35 + spouse: + age: 35 + child: + age: 8 + is_tax_unit_dependent: true + ssn_card_type: OTHER_NON_CITIZEN + tax_units: + tax_unit: + members: [head, spouse, child] + filing_status: JOINT + me_sales_and_property_tax_fairness_credit_income: 10_000 + households: + household: + members: [head, spouse, child] + state_code: ME + output: + ctc_qualifying_children: 0 + me_fairness_credit_qualifying_children: 1 + me_sales_tax_fairness_credit: 250 + +- name: Maine counts an adult dependent with a child for a head of household in 2025 + period: 2025 + input: + people: + head: + age: 45 + adult_dependent: + age: 20 + is_tax_unit_dependent: true + child: + age: 10 + is_tax_unit_dependent: true + tax_units: + tax_unit: + members: [head, adult_dependent, child] + filing_status: HEAD_OF_HOUSEHOLD + me_sales_and_property_tax_fairness_credit_income: 10_000 + households: + household: + members: [head, adult_dependent, child] + state_code: ME + output: + ctc_qualifying_children: 1 + me_fairness_credit_qualifying_children: 2 + # 2025 Schedule PTFC/STFC line 8 table, head of household, line 13a is more + # than 1: $4,050. + me_property_tax_fairness_credit_benefit_base: 4_050 + # 2025 Schedule PTFC/STFC line 17 table, head of household, $0-$38,200, line + # 13a is 2: $250. + me_sales_tax_fairness_credit: 250 + +- name: Maine does not count a dependent without any TIN in 2025 + # The credit for other dependents requires the dependent's SSN, ITIN or ATIN. + period: 2025 + input: + people: + head: + age: 45 + spouse: + age: 45 + child: + age: 17 + is_tax_unit_dependent: true + ssn_card_type: NONE + has_tin: false + tax_units: + tax_unit: + members: [head, spouse, child] + filing_status: JOINT + me_sales_and_property_tax_fairness_credit_income: 10_000 + households: + household: + members: [head, spouse, child] + state_code: ME + output: + ctc_qualifying_children: 0 + me_fairness_credit_qualifying_children: 0 + me_property_tax_fairness_credit_benefit_base: 3_300 + me_sales_tax_fairness_credit: 215 + +- name: Maine counts the Child Tax Credit child and the older dependent with a TIN in 2025 + period: 2025 + input: + people: + head: + age: 45 + spouse: + age: 45 + child: + age: 8 + is_tax_unit_dependent: true + teen: + age: 17 + is_tax_unit_dependent: true + adult_dependent: + age: 19 + is_tax_unit_dependent: true + ssn_card_type: NONE + has_tin: false + tax_units: + tax_unit: + members: [head, spouse, child, teen, adult_dependent] + filing_status: JOINT + me_sales_and_property_tax_fairness_credit_income: 10_000 + households: + household: + members: [head, spouse, child, teen, adult_dependent] + state_code: ME + output: + ctc_qualifying_children: 1 + me_fairness_credit_qualifying_children: 2 + # 2025 Schedule PTFC/STFC line 17 table, joint, $0-$50,950, line 13a is 2+: $280. + me_sales_tax_fairness_credit: 280 + +- name: Maine counts only Child Tax Credit children before the credit for other dependents in 2017 + # IRC 24(h)(4) applies from 2018, so a 17-year-old dependent does not count in 2017. + period: 2017 + input: + people: + head: + age: 45 + spouse: + age: 45 + child: + age: 8 + is_tax_unit_dependent: true + teen: + age: 17 + is_tax_unit_dependent: true + tax_units: + tax_unit: + members: [head, spouse, child, teen] + filing_status: JOINT + households: + household: + members: [head, spouse, child, teen] + state_code: ME + output: + ctc_qualifying_children: 1 + me_fairness_credit_qualifying_children: 1 diff --git a/policyengine_us/variables/gov/states/me/tax/income/credits/fairness/me_fairness_credit_qualifying_children.py b/policyengine_us/variables/gov/states/me/tax/income/credits/fairness/me_fairness_credit_qualifying_children.py index 630af3ede5e..6d5e35651bc 100644 --- a/policyengine_us/variables/gov/states/me/tax/income/credits/fairness/me_fairness_credit_qualifying_children.py +++ b/policyengine_us/variables/gov/states/me/tax/income/credits/fairness/me_fairness_credit_qualifying_children.py @@ -4,12 +4,12 @@ class me_fairness_credit_qualifying_children(Variable): value_type = int entity = TaxUnit - label = "Maine sales and property tax fairness credit qualifying children" + label = "Maine sales and property tax fairness credit qualifying children and dependents" documentation = ( - "Number of qualifying children for whom the filer can claim a federal " - "credit under IRC section 24 (the Child Tax Credit or the credit for " - "other dependents), for the Maine sales tax and property tax fairness " - "credits." + "Number of qualifying children and dependents for whom the filer can " + "claim a federal credit under IRC section 24 (the Child Tax Credit or " + "the credit for other dependents), for the Maine sales tax and " + "property tax fairness credits." ) definition_period = YEAR defined_for = StateCode.ME @@ -18,6 +18,12 @@ class me_fairness_credit_qualifying_children(Variable): "https://legislature.maine.gov/statutes/36/title36sec5213-A.html", # 36 MRSA 5219-KK(1)(A-1)(2) and (3). "https://legislature.maine.gov/statutes/36/title36sec5219-KK.html", + # 2025 Form 1040ME Instructions, line 13a, Property Tax Fairness + # Credit and Sales Tax Fairness Credit. PDF pages 5, 11. + "https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/25_1040me_gen_instr_w_cover_pg.pdf#page=5", + # 2025 Schedule PTFC/STFC, line 8, line 17 and instructions. + # PDF pages 2-4. + "https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/25_1040me_sch_ptfc_fillable.pdf#page=2", # 2025 Instructions for Schedule 8812, TIN Required by Due Date of # Your Return To Claim the ODC, and Credit for Other Dependents. # PDF pages 1-2. @@ -29,17 +35,15 @@ def formula(tax_unit, period, parameters): # 36 MRSA 5213-A(1)(A-1)(2) and 5219-KK(1)(A-1)(2)-(3) count each # "qualifying child or dependent" for whom the filer "can claim the # federal child tax credit pursuant to the Code, Section 24". Section - # 24 includes the credit for other dependents of IRC 24(h)(4), and IRC - # 24(h)(4)(C) gives that credit for a child whose Child Tax Credit is - # denied by the social security number rule of IRC 24(h)(7). So a - # child whose filer fails the Child Tax Credit identification test - # still counts when the filer meets the taxpayer identification test - # for the credit for other dependents. Dependents who are not CTC - # qualifying children are not counted here. - qualifying_child = person( - "ctc_qualifying_child_ignoring_filer_identification", period - ) - filer_meets_identification_requirements = tax_unit( - "filer_meets_ctc_identification_requirements", period - ) - return tax_unit.sum(qualifying_child) * filer_meets_identification_requirements + # 24 includes the credit for other dependents of IRC 24(h)(4), and the + # Form 1040ME line 13a instructions count each dependent for whom the + # filer is eligible to claim "the federal child tax credit or the + # credit for other dependents". So a dependent counts when either + # credit is allowed for that person before the phase-out: a child + # under 17, a child with an ITIN but no SSN, a child whose filer fails + # the Child Tax Credit SSN rule (IRC 24(h)(4)(C)), or an older + # dependent. The dependent and the filer still need a TIN (IRC 24(e)). + # The credit for other dependents starts in 2018, so earlier years + # count only Child Tax Credit children. + section_24_amount = person("ctc_individual_maximum", period) + return tax_unit.sum(section_24_amount > 0)