Follow state statutes where forms differ: NM medical exemption, VT CDCC, NY/NYC household credit, PR EITC

changelog.d/statute-first-state-income-tax.fixed.md

@@ -0,0 +1 @@
+Follow the statute where state forms differ: New Mexico's senior medical exemption needs expenses over $28,000; Vermont's 2021 low-income child care credit needs AGI under the threshold; the New York and New York City household credits count the federal exemptions of married, head-of-household and surviving-spouse filers instead of denying the credit when a filer can be claimed (Tax Law 606(b), 1310(d)), and the New York City credit for a married couple filing separately uses the couple's AGI and exemptions; and Puerto Rico's earned income credit uses Hacienda's 2024 and 2025 inflation-adjusted schedules.

policyengine_us/parameters/gov/local/ny/nyc/tax/income/credits/household/separate_per_dependent.yaml

@@ -1,4 +1,8 @@
-description: NYC provides a household credit of this amount per dependent for separate filers.
+description: IT-201 Table 6 lists this NYC household credit amount per dependent for separate filers.
+# Not used by nyc_household_credit: Tax Law 1310(d) gives a separate filer
+# "one-half the credit otherwise allowed his or her household", which the
+# model computes from the married amounts (other_per_dependent). Table 6
+# rounds the half amount per exemption, which can differ by a dollar or more.
 metadata:
   type: single_amount
   threshold_unit: currency-USD

policyengine_us/parameters/gov/states/nm/tax/income/exemptions/unreimbursed_medical_care_expense/min_expenses.yaml

@@ -1,4 +1,4 @@
-description: New Mexico provides the unreimbursed medical care expense exemption for filers with expenses at or above this amount.
+description: New Mexico provides the unreimbursed medical care expense exemption for filers with expenses above this amount.
 values:
   2005-01-01: 28_000
 metadata:

policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/income_limit_in_effect.yaml

@@ -1,4 +1,4 @@
-description: Vermont limits the Child and Dependent Care Credit to filers with adjusted gross income at or below the low-income threshold when this is in effect.
+description: Vermont limits the Child and Dependent Care Credit to filers with adjusted gross income below the low-income threshold when this is in effect.
 values:
   # Through 2021 the Vermont credit under 32 V.S.A. § 5828c was the low-income
   # child and dependent care credit, limited to filers with AGI below the

policyengine_us/parameters/gov/territories/pr/tax/income/credits/earned_income/max_amount.yaml

@@ -4,26 +4,39 @@ brackets:
       2023-01-01: 0
     amount:
       2023-01-01: 1_656
+      2024-01-01: 1_745
+      2025-01-01: 1_794
   - threshold: 
       2023-01-01: 1
     amount:
       2023-01-01: 3_864
+      2024-01-01: 4_071
+      2025-01-01: 4_186
   - threshold: 
       2023-01-01: 2
     amount:
       2023-01-01: 6_072
+      2024-01-01: 6_400
+      2025-01-01: 6_576
   - threshold: 
       2023-01-01: 3
     amount:
       2023-01-01: 7_173
+      2024-01-01: 7_563
+      2025-01-01: 7_774
 metadata:
   amount_unit: currency-USD
   threshold_unit: child
   type: single_amount
   label: Puerto Rico earned income credit max amount
   period: year
   reference:
-    # discrepancy: legal statute max amount doesn't correspond with tax form values 
+    - title: "Hacienda Boletín Informativo de Rentas Internas 24-04, inflation adjustment to the earned income credit for 2024 #page 1-3"
+      href: https://hacienda.pr.gov/sites/default/files/publicaciones/2024/12/bi_ri_24-04_-_credito_por_trabajo_-_ajuste_por_inflacion_2024_firmada_23-dic-2024.pdf#page=1
+    - title: "Hacienda Boletín Informativo de Rentas Internas 26-01, inflation adjustment to the earned income credit for 2025 #page 1-3"
+      href: https://hacienda.pr.gov/sites/default/files/publicaciones/2026/02/bi_ri_26-01_ajuste_por_inflacion_al_credito_por_trabajo_para_el_ano_2025_signed.pdf#page=1
+    - title: P.R. Internal Revenue Code § 1052.01(i), 13 L.P.R.A. § 30211(i) (inflation adjustment as adjusted by the federal IRS)
+      href: https://docs.pr.gov/files/OCIF/LEYES-REGLAMENTOS-CARTAS-CIRCULARES/Leyes-delegan-Facultad-OCIF/Ley%20N%C3%BAm.%201-2011%20-%20C%C3%B3digo%20de%20Rentas%20Internas%20para%20un%20Nuevo%20Puerto%20Rico.pdf#page=300
     - title: P.R. Laws tit. 13, § 30211 (1)-(6)
       href: https://law.justia.com/codes/puerto-rico/title-thirteen/subtitle-17/part-ii/chapter-1007/subchapter-b/30211/
     - title: Schedule CT Individual, Earned Income Credit, 2023

policyengine_us/parameters/gov/territories/pr/tax/income/credits/earned_income/phase_out/threshold/joint.yaml

@@ -5,27 +5,40 @@ brackets:
       2023-01-01: 0
     amount:
       2023-01-01: 19_870
+      2024-01-01: 20_940
+      2025-01-01: 21_530
   - threshold: 
       2023-01-01: 1
     amount:
       2023-01-01: 24_280
+      2024-01-01: 25_590
+      2025-01-01: 26_310
   - threshold: 
       2023-01-01: 2
     amount:
       2023-01-01: 27_590
+      2024-01-01: 29_080
+      2025-01-01: 29_900
   - threshold: 
       2023-01-01: 3
     amount:
       2023-01-01: 27_590
+      2024-01-01: 29_080
+      2025-01-01: 29_900
 metadata:
   amount_unit: currency-USD
   threshold_unit: child
   type: single_amount
   label: Puerto Rico earned income credit phase out threshold
   period: year
   reference:
+    - title: "Hacienda Boletín Informativo de Rentas Internas 24-04, inflation adjustment to the earned income credit for 2024 #page 1-3"
+      href: https://hacienda.pr.gov/sites/default/files/publicaciones/2024/12/bi_ri_24-04_-_credito_por_trabajo_-_ajuste_por_inflacion_2024_firmada_23-dic-2024.pdf#page=1
+    - title: "Hacienda Boletín Informativo de Rentas Internas 26-01, inflation adjustment to the earned income credit for 2025 #page 1-3"
+      href: https://hacienda.pr.gov/sites/default/files/publicaciones/2026/02/bi_ri_26-01_ajuste_por_inflacion_al_credito_por_trabajo_para_el_ano_2025_signed.pdf#page=1
+    - title: P.R. Internal Revenue Code § 1052.01(i), 13 L.P.R.A. § 30211(i) (inflation adjustment as adjusted by the federal IRS)
+      href: https://docs.pr.gov/files/OCIF/LEYES-REGLAMENTOS-CARTAS-CIRCULARES/Leyes-delegan-Facultad-OCIF/Ley%20N%C3%BAm.%201-2011%20-%20C%C3%B3digo%20de%20Rentas%20Internas%20para%20un%20Nuevo%20Puerto%20Rico.pdf#page=300
     - title: Schedule CT Individual, Earned Income Credit, 2023
       href: https://hacienda.pr.gov/sites/default/files/schedule_ct_rev._jul_5_23_informative_-_instructions.pdf#page=2
-    # discrepancy: legal statute phase out thresholds do not correspond with tax form values
     - title: P.R. Laws tit. 13, § 30211 (1) - (6)
       href: https://law.justia.com/codes/puerto-rico/title-thirteen/subtitle-17/part-ii/chapter-1007/subchapter-b/30211/

policyengine_us/parameters/gov/territories/pr/tax/income/credits/earned_income/phase_out/threshold/single.yaml

@@ -5,27 +5,40 @@ brackets:
       2023-01-01: 0
     amount:
       2023-01-01: 17_660
+      2024-01-01: 18_610
+      2025-01-01: 19_130
   - threshold: 
       2023-01-01: 1
     amount:
       2023-01-01: 19_870
+      2024-01-01: 20_940
+      2025-01-01: 21_530
   - threshold: 
       2023-01-01: 2
     amount:
       2023-01-01: 23_180
+      2024-01-01: 24_430
+      2025-01-01: 25_110
   - threshold: 
       2023-01-01: 3
     amount:
       2023-01-01: 23_180
+      2024-01-01: 24_430
+      2025-01-01: 25_110
 metadata:
   amount_unit: currency-USD
   threshold_unit: child
   type: single_amount
   label: Puerto Rico earned income credit phase out threshold
   period: year
   reference:
+    - title: "Hacienda Boletín Informativo de Rentas Internas 24-04, inflation adjustment to the earned income credit for 2024 #page 1-3"
+      href: https://hacienda.pr.gov/sites/default/files/publicaciones/2024/12/bi_ri_24-04_-_credito_por_trabajo_-_ajuste_por_inflacion_2024_firmada_23-dic-2024.pdf#page=1
+    - title: "Hacienda Boletín Informativo de Rentas Internas 26-01, inflation adjustment to the earned income credit for 2025 #page 1-3"
+      href: https://hacienda.pr.gov/sites/default/files/publicaciones/2026/02/bi_ri_26-01_ajuste_por_inflacion_al_credito_por_trabajo_para_el_ano_2025_signed.pdf#page=1
+    - title: P.R. Internal Revenue Code § 1052.01(i), 13 L.P.R.A. § 30211(i) (inflation adjustment as adjusted by the federal IRS)
+      href: https://docs.pr.gov/files/OCIF/LEYES-REGLAMENTOS-CARTAS-CIRCULARES/Leyes-delegan-Facultad-OCIF/Ley%20N%C3%BAm.%201-2011%20-%20C%C3%B3digo%20de%20Rentas%20Internas%20para%20un%20Nuevo%20Puerto%20Rico.pdf#page=300
     - title: Schedule CT Individual, Earned Income Credit, 2023
       href: https://hacienda.pr.gov/sites/default/files/schedule_ct_rev._jul_5_23_informative_-_instructions.pdf#page=2
-    # discrepancy: legal statute phase out thresholds do not correspond with tax form values
     - title: P.R. Laws tit. 13, § 30211 (1) - (6)
       href: https://law.justia.com/codes/puerto-rico/title-thirteen/subtitle-17/part-ii/chapter-1007/subchapter-b/30211/

policyengine_us/parameters/gov/territories/pr/tax/income/credits/earned_income/unearned_income/limit.yaml

@@ -6,7 +6,9 @@ metadata:
   label: Puerto Rico earned income credit unearned income limit
   period: year
   reference:
-    # discrepancy: legal statute lists unearned income as 2_200 
+    # Section 1052.01(e) keeps older $2,200 wording but adds a proviso for
+    # taxable years after 2020 allowing other income, including exempt
+    # unearned income, equal to or below $10,000.
     - title: P.R. Laws tit. 13, § 30211 (6)(e)
       href: https://law.justia.com/codes/puerto-rico/title-thirteen/subtitle-17/part-ii/chapter-1007/subchapter-b/30211/
     - title: Schedule CT Individual, Earned Income Credit, 2023

policyengine_us/tests/core/test_medical_expense_premium_conservation.py

@@ -395,7 +395,10 @@ def _state_simulation(cases, reference_system, with_se_deduction):
         # deduction. The oracle preserves the supplied amount exactly as main
         # does; only the computed path restores an applied federal exclusion.
         main_base = case["subtotal"] if supplied else gross
+        # The credit (NMSA 7-2-18.13) takes expenses of $28,000 or more; the
+        # exemption (NMSA 7-2-5.9(A)) takes expenses that "exceed" $28,000.
         senior_eligible = case["age"] >= 65 and main_base >= 28_000
+        senior_exemption_eligible = case["age"] >= 65 and main_base > 28_000
         denominator = 2 if case["filing_status"] == "SEPARATE" else 1
 
         for state in ("ND", "NM"):
@@ -464,7 +467,7 @@ def _state_simulation(cases, reference_system, with_se_deduction):
             )
             # NMSA 7-2-5.9 and PIT-ADJ line 18 allow the full exemption.
             expectations["nm_medical_expense_exemption"].append(
-                3_000 if state == "NM" and senior_eligible else 0
+                3_000 if state == "NM" and senior_exemption_eligible else 0
             )
     simulation = Simulation(
         tax_benefit_system=reference_system,

policyengine_us/tests/core/test_nm_ctc_children_medical_exemption_invariants.py

@@ -4,8 +4,9 @@
 by IRC 152(c), which has no taxpayer identification number requirement, so
 `nm_ctc_qualifying_children` counts 152(c) children whatever their Social
 Security number status. NMSA 7-2-5.9 gives $3,000 to a filer or spouse 65 or
-older with at least $28,000 of medical care expenses (the PIT-ADJ reading of
-the threshold), with no halving for married filing separately.
+older with more than $28,000 of medical care expenses (NMSA 7-2-5.9(A); the
+PIT-ADJ instructions' "$28,000 or more" is not followed), with no halving for
+married filing separately.
 
 For households drawn by Hypothesis and a seeded population, in 2023-2026:
 
@@ -25,8 +26,8 @@
 5. Separate filing: a single adult filing separately gets half of `nm_ctc`
    (7-2-18.34(G)) and the whole `nm_medical_expense_exemption`.
 6. Reference exemption: `nm_medical_expense_exemption` is $3,000 exactly when
-   a filer (not a dependent) is 65 or older and medical expenses are at least
-   $28,000, and 0 otherwise.
+   a filer (not a dependent) is 65 or older and medical expenses are more than
+   $28,000 (NMSA 7-2-5.9(A)), and 0 otherwise.
 """
 
 import numpy as np
@@ -182,7 +183,7 @@ def unit(adults, dependents, expenses=0.0):
         unit([adult(25), adult(20)], [dependent(22, student=True)]),
         # The only 65+ person is a dependent parent.
         unit([adult(40)], [elderly_parent], expenses=30_000.0),
-        # A 65+ filer with exactly $28,000 of expenses.
+        # A 65+ filer with exactly $28,000 of expenses (not over $28,000).
         unit([adult(70)], [], expenses=28_000.0),
     ]
 
@@ -268,7 +269,8 @@ def _reference_exemption(unit):
     if unit["state"] != "NM":
         return 0
     filer_65 = any(a["age"] >= 65 for a in unit["adults"])
-    return EXEMPTION * (filer_65 and unit["medical_expenses"] >= MIN_EXPENSES)
+    # NMSA 7-2-5.9(A): expenses that "exceed" $28,000.
+    return EXEMPTION * (filer_65 and unit["medical_expenses"] > MIN_EXPENSES)
 
 
 def _describe(unit):
@@ -336,7 +338,7 @@ def _assert_coverage(drawn_units, credit, exemption):
             u["state"] == "NM"
             and all(a["age"] < 65 for a in u["adults"])
             and any(d["age"] >= 65 for d in u["dependents"])
-            and u["medical_expenses"] >= MIN_EXPENSES
+            and u["medical_expenses"] > MIN_EXPENSES
             for u in drawn_units
         ]
     )

policyengine_us/tests/core/test_state_medical_expense_input_deletion.py

@@ -69,13 +69,14 @@ def test_nd_paid_cost_base_after_medical_subtotal_deletion(delete_subtotal):
 
 @pytest.mark.parametrize("delete_subtotal", SUBTOTAL_DELETION_CASES)
 def test_nm_senior_benefits_after_medical_subtotal_deletion(delete_subtotal):
-    simulation = _simulation("NM", other_expenses=22_000)
+    simulation = _simulation("NM", other_expenses=22_001)
     if delete_subtotal:
         simulation.delete_arrays("itemized_medical_expenses", PERIOD)
 
-    # The recomputed federal subtotal is 27,000, but restoring its 1,000
-    # exclusion meets NM's 28,000 paid-cost threshold. Calculate both before
-    # asserting to preserve evidence.
+    # The recomputed federal subtotal is 27,001, but restoring its 1,000
+    # exclusion gives 28,001 of paid costs, which meets the credit's $28,000
+    # threshold and exceeds the exemption's. Calculate both before asserting
+    # to preserve evidence.
     benefits = tuple(
         simulation.calculate(variable, PERIOD).item()
         for variable in (