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Check Montana's pension exemption in the Montana AGI pooling test #10496

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Merged
hua7450 merged 1 commit into from
Oct 27, 2026
Merged

Check Montana's pension exemption in the Montana AGI pooling test #10496

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1 change: 1 addition & 0 deletions changelog.d/fix-mt-agi-invariant-pension-exemption.fixed.md
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Original file line number Diff line number Diff line change
@@ -0,0 +1 @@
Exclude filers with Montana's 2021–2023 partial pension, annuity, and IRA income exemption from the Montana AGI pooling test, which assumed only `mt_subtractions` reduce Montana AGI.
13 changes: 11 additions & 2 deletions policyengine_us/tests/core/test_mt_state_agi_invariants.py
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Expand Up @@ -24,8 +24,11 @@
2. Reporting: `taxsim_state_agi`, and its alias `state_agi`, equal `mt_agi`
through 2023 and federal adjusted gross income from 2024.
3. Pooling: through 2023, a unit on the joint path with non-negative federal
AGI, no Montana additions or subtractions and no Social Security reports
federal AGI, so one spouse's loss offsets the other spouse's income.
AGI, no Montana additions or subtractions, no partial pension, annuity, and
IRA income exemption and no Social Security reports federal AGI, so one
spouse's loss offsets the other spouse's income. The exemption is outside
`mt_subtractions` (`mt_agi_indiv` and `mt_agi_joint` subtract it), so it is
checked separately.
4. Bounds: `mt_agi` is never negative, and a unit outside Montana has no
`mt_agi`.

Expand Down Expand Up @@ -72,11 +75,13 @@
"taxsim_state_agi",
"state_agi",
"adjusted_gross_income",
"mt_pension_exemption_joint",
)
PERSON_OUTPUTS = (
"mt_agi_indiv",
"mt_additions",
"mt_subtractions",
"mt_pension_exemption_indiv",
"social_security",
)

Expand Down Expand Up @@ -196,6 +201,8 @@ def _check(units, year):
unadjusted = (
(run["mt_additions"] == 0)
& (run["mt_subtractions"] == 0)
& (run["mt_pension_exemption_indiv"] == 0)
& (run["mt_pension_exemption_joint"] == 0)
& (run["social_security"] == 0)
)
pooled = in_mt & ~separate & unadjusted & (run["adjusted_gross_income"] >= 0)
Expand Down Expand Up @@ -231,6 +238,8 @@ def test_seeded_grid(year):
& (run["adjusted_gross_income"] >= 0)
& (run["mt_additions"] == 0)
& (run["mt_subtractions"] == 0)
& (run["mt_pension_exemption_indiv"] == 0)
& (run["mt_pension_exemption_joint"] == 0)
& (run["social_security"] == 0)
)
assert (floored_sum[joint_path] > run["mt_agi"][joint_path] + 1).any()
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