diff --git a/changelog.d/dc-eitc-match-2025.fixed.md b/changelog.d/dc-eitc-match-2025.fixed.md new file mode 100644 index 00000000000..fed9f9ee128 --- /dev/null +++ b/changelog.d/dc-eitc-match-2025.fixed.md @@ -0,0 +1 @@ +Set the DC EITC match for filers with qualifying children to 85% for 2026 through 2028 and 100% from 2029, after the temporary 100% match for 2025 expired. diff --git a/policyengine_us/parameters/gov/states/dc/tax/income/credits/eitc/with_children/match.yaml b/policyengine_us/parameters/gov/states/dc/tax/income/credits/eitc/with_children/match.yaml index c48798bcdfe..5e954455a79 100644 --- a/policyengine_us/parameters/gov/states/dc/tax/income/credits/eitc/with_children/match.yaml +++ b/policyengine_us/parameters/gov/states/dc/tax/income/credits/eitc/with_children/match.yaml @@ -6,6 +6,10 @@ metadata: reference: - title: Code of the District of Columbia § 47–1806.04 (f)(1) href: https://code.dccouncil.gov/us/dc/council/code/sections/47-1806.04#(f)(1) + - title: D.C. Income and Franchise Tax Conformity and Revision Emergency Amendment Act of 2025 (D.C. Act 26-214), § 2(i) + href: https://code.dccouncil.gov/us/dc/council/acts/26-214 + - title: D.C. Income and Franchise Tax Conformity and Revision Temporary Amendment Act of 2025 (D.C. Law 26-89), § 2(i) + href: https://code.dccouncil.gov/us/dc/council/laws/26-89 - title: 2023 DC Form D-40 Booklet, Page 34, Line 27c href: https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2023_D40_Book_Final_012324.pdf#page=34 - title: 2024 DC Form D-40 Booklet, Page 34, Line 27c @@ -17,4 +21,12 @@ metadata: values: 2015-01-01: 0.4 # (f)(1)(A) and (f)(1)(B) 2022-01-01: 0.7 # (f)(1)(B-1) - 2025-01-01: 1 # (f)(1)(B-2) - DC Code already updated to reflect 100% match + # D.C. Act 26-214 § 2(i) (emergency, Dec. 3, 2025 to Mar. 3, 2026) and + # D.C. Law 26-89 § 2(i) (temporary, Feb. 12 to Sep. 25, 2026) set (B-2) to + # 100% for taxable years after 2024 and repealed (B-3). + 2025-01-01: 1 + # With the temporary law expired, the permanent (B-2) gives 85% for taxable + # years beginning after December 31, 2024, and (B-3) gives 100% after + # December 31, 2028. + 2026-01-01: 0.85 # (f)(1)(B-2) + 2029-01-01: 1 # (f)(1)(B-3) diff --git a/policyengine_us/tests/policy/baseline/gov/states/dc/tax/income/dc_eitc_with_qualifying_child.yaml b/policyengine_us/tests/policy/baseline/gov/states/dc/tax/income/dc_eitc_with_qualifying_child.yaml index dd55b7dfbf1..c6658eaf056 100644 --- a/policyengine_us/tests/policy/baseline/gov/states/dc/tax/income/dc_eitc_with_qualifying_child.yaml +++ b/policyengine_us/tests/policy/baseline/gov/states/dc/tax/income/dc_eitc_with_qualifying_child.yaml @@ -125,3 +125,88 @@ # wages, so federal earned income is $6,000 (Form 1040 EIC Worksheet B, # line 4b, combines both spouses' amounts on a joint return). dc_eitc_with_qualifying_child: 1_428 + +- name: DC EITC with a qualifying child is 85% of the federal credit in 2026 (permanent (B-2)) + period: 2026 + absolute_error_margin: 0.01 + input: + people: + head: + age: 30 + employment_income: 10_000 + is_tax_unit_head: true + child: + age: 5 + is_tax_unit_dependent: true + tax_units: + tax_unit: + members: [head, child] + filing_status: HEAD_OF_HOUSEHOLD + spm_units: + spm_unit: + members: [head, child] + households: + household: + members: [head, child] + state_code: DC + output: + # Federal EITC: 34% phase-in x $10,000 = $3,400, below the one-child + # maximum. DC: 85% x $3,400 = $2,890. + eitc: 3_400 + dc_eitc_with_qualifying_child: 2_890 + +- name: DC EITC with a qualifying child is still 85% in 2028 + period: 2028 + absolute_error_margin: 0.01 + input: + people: + head: + age: 30 + employment_income: 10_000 + is_tax_unit_head: true + child: + age: 5 + is_tax_unit_dependent: true + tax_units: + tax_unit: + members: [head, child] + filing_status: HEAD_OF_HOUSEHOLD + spm_units: + spm_unit: + members: [head, child] + households: + household: + members: [head, child] + state_code: DC + output: + # 85% x (34% x $10,000) = $2,890. + eitc: 3_400 + dc_eitc_with_qualifying_child: 2_890 + +- name: DC EITC with a qualifying child returns to 100% in 2029 ((B-3)) + period: 2029 + absolute_error_margin: 0.01 + input: + people: + head: + age: 30 + employment_income: 10_000 + is_tax_unit_head: true + child: + age: 5 + is_tax_unit_dependent: true + tax_units: + tax_unit: + members: [head, child] + filing_status: HEAD_OF_HOUSEHOLD + spm_units: + spm_unit: + members: [head, child] + households: + household: + members: [head, child] + state_code: DC + output: + # 100% x (34% x $10,000) = $3,400. + eitc: 3_400 + dc_eitc_with_qualifying_child: 3_400 diff --git a/source_conflicts/candidates.yaml b/source_conflicts/candidates.yaml index 38165d2d54d..bec565eb155 100644 --- a/source_conflicts/candidates.yaml +++ b/source_conflicts/candidates.yaml @@ -1706,6 +1706,51 @@ candidates: no DC source settles years before 2023 and that setting it to false applies the DC-law reading. The October 2026 ruling chose the childless schedule; verify ARPA's effect before identifying a statutory departure and establish any pre-2021 conflict separately. +- id: us-dc:eitc-with-children-2025-rate + program: income-tax + years: + from: 2025 + to: 2025 + type: tax + question: Does the TY2025 DC EITC for filers with qualifying children match 100% of the federal credit under the + emergency and temporary acts in force through the filing season, or 85% under the permanent (B-2) as codified + after the temporary law expired? + sources: + - kind: statute + citation: D.C. Code §47-1806.04(f)(1)(B-2), permanent text, 85% for taxable years beginning after December 31, + 2024 + url: https://code.dccouncil.gov/us/dc/council/code/sections/47-1806.04#(f)(1) + - kind: statute + citation: D.C. Act 26-214 §2(i) (emergency, December 3, 2025 to March 3, 2026) + url: https://code.dccouncil.gov/us/dc/council/acts/26-214 + - kind: statute + citation: D.C. Law 26-89 §2(i) (temporary, February 12 to September 25, 2026) + url: https://code.dccouncil.gov/us/dc/council/laws/26-89 + - kind: guidance + citation: D.C. Attorney General opinion on decoupling, retroactivity and validity, February 24, 2026 + url: https://oag.dc.gov/sites/default/files/2026-02/AG-Opinion-Decoupling-Retroactivity-and-Validity-.pdf + - kind: guidance + citation: OTR EITC FAQs, percent of federal EIC by tax year + url: https://otr.cfo.dc.gov/page/eitc-faqs + - kind: instructions + citation: 2025 D-40 booklet, line 27d, PDF p.43 + url: https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2025_D40_Book_082026_v1.pdf#page=43 + readings: + statute: The emergency act applied as of January 1, 2025, and held at the close of 2025, and the temporary law + held through the filing season, so TY2025 is 100%. + other: The permanent text, once the temporary law expired, gives 85% for every year after 2024. + example: Head of household, $10,000 wages, one child, TY2025, federal EITC $3,400. `dc_eitc` is $3,400 at 100% + and $2,890 at 85%. + pe_us: + follows: statute + code: + - policyengine_us/parameters/gov/states/dc/tax/income/credits/eitc/with_children/match.yaml + prs: + - https://github.com/PolicyEngine/policyengine-us/pull/10638 + state: ruled + note: PE-US applies 100% for 2025, 85% for 2026 to 2028 and 100% from 2029. The Attorney General concluded that + H.J.Res. 142 did not repeal the temporary act, and OTR's FAQ and the 2025 D-40 booklet both use 100% for 2025. + A later FY2027 Budget Support Act could change 2026 onward. - id: us-dc:liheap-income-floor-vs-smi-limit program: liheap years: