Fix MO elderly pension/SS exemptions

changelog_entry.yaml

@@ -0,0 +1,4 @@
+- bump: patch
+  changes:
+    fixed:
+      - Missouri Social Security deduction now correctly requires age 62+ (SSDI has no age limit per MO Form MO-A Section C).

policyengine_us/parameters/gov/states/mo/tax/income/deductions/social_security_and_public_pension/age_threshold.yaml

@@ -0,0 +1,13 @@
+description: Missouri requires taxpayers to be at least this age by December 31 to claim the social security deduction; social security disability has no age limit.
+metadata:
+  unit: year
+  period: year
+  label: Missouri social security deduction age threshold
+  reference:
+    - title: 2024 Form MO-A - Individual Income Tax Adjustments, Part 3 - Section C
+      href: https://dor.mo.gov/forms/MO-A_2024.pdf#page=3
+    - title: MO Statute Chapter 143.124
+      href: https://revisor.mo.gov/main/OneSection.aspx?section=143.124
+
+values:
+  2021-01-01: 62

policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/deductions/mo_pension_and_ss_or_ssd_deduction/integration_tests/mo_pension_and_ss_or_ssd.yaml

@@ -322,7 +322,8 @@
         employment_income: 18_010
         taxable_interest_income: 5_505
         taxable_private_pension_income: 500
-        social_security: 9_000
+        # Use SSDI since people are under 62 - SSDI has no age limit for MO deduction
+        social_security_disability: 9_000
         ssi: 0  # not in TAXSIM35
         ma_state_supplement: 0  # not in TAXSIM35
         wic: 0  # not in TAXSIM35
@@ -332,7 +333,8 @@
         employment_income: 57_010
         taxable_interest_income: 5_505
         taxable_private_pension_income: 500
-        social_security: 9_000
+        # Use SSDI since people are under 62 - SSDI has no age limit for MO deduction
+        social_security_disability: 9_000
         ssi: 0  # not in TAXSIM35
         ma_state_supplement: 0  # not in TAXSIM35
         wic: 0  # not in TAXSIM35
@@ -418,3 +420,34 @@
   output:  # expected results from hand calculations using 2021 MO Form 1040
     mo_pension_and_ss_or_ssd_deduction_section_b: [1_485, 1_485, 0]
     mo_pension_and_ss_or_ssd_deduction_section_c: [750, 750, 0]
+
+# Test from GitHub issue #7293: MO elderly pension and SS exemption
+- name: MO elderly pension and SS exemption for age 75 (GitHub issue 7293)
+  period: 2024
+  absolute_error_margin: 10
+  input:
+    people:
+      person1:
+        age: 75
+        employment_income: 0
+        taxable_interest_income: 131
+        taxable_private_pension_income: 25_717
+        social_security: 24_087
+        is_tax_unit_head: true
+    tax_units:
+      tax_unit:
+        members: [person1]
+    spm_units:
+      spm_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_fips: 29  # Missouri
+  output:
+    # MO taxable income = Federal AGI - standard deduction - fed tax deduction - pension/SS deduction
+    # Federal AGI = $33,656, Standard deduction = $16,550 (65+ single)
+    # Pension/SS deduction = Section B ($5,152) + Section C ($7,808) = $12,960
+    # Federal income tax deduction ~$455
+    mo_taxable_income: 3691
+    mo_income_tax: 54

policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/deductions/mo_pension_and_ss_or_ssd_deduction/mo_pension_and_ss_or_ssd_deduction_section_c.yaml

@@ -1,3 +1,6 @@
+# Tests for Missouri Social Security/SSDI Deduction (Section C of Form MO-A)
+# Per MO-A 2024: SS deduction requires age 62+ by Dec 31; SSDI has no age limit.
+
 - name: No Values
   period: 2021
   absolute_error_margin: 0
@@ -6,148 +9,146 @@
     taxable_social_security: 0
     filing_status: SINGLE
     state_code: MO
+    age: 65
   output:
     mo_pension_and_ss_or_ssd_deduction_section_c: 0.0
 
-- name: AGI below threshold, private pension income, taxable social security income, single
+- name: AGI below threshold, taxable social security income, single, age 65
   period: 2021
   absolute_error_margin: 0
   input:
     mo_adjusted_gross_income: 30_000
     taxable_social_security: 5_000
     filing_status: SINGLE
     state_code: MO
+    age: 65
   output:
     mo_pension_and_ss_or_ssd_deduction_section_c: 5_000
 
-- name: AGI below threshold, private pension income, without taxable social security income, single
+- name: AGI below threshold, without taxable social security income, single, age 65
   period: 2021
   absolute_error_margin: 30_000
   input:
     mo_adjusted_gross_income: 30_000
     taxable_social_security: 0
     filing_status: SINGLE
     state_code: MO
+    age: 65
   output:
     mo_pension_and_ss_or_ssd_deduction_section_c: 0.0
 
-- name: AGI above threshold, private pension income, taxable social security income, single
+- name: AGI above threshold, taxable social security income, single, age 65
   period: 2021
   absolute_error_margin: 0
   input:
     mo_adjusted_gross_income: 95_000
     taxable_social_security: 15_000
     filing_status: SINGLE
     state_code: MO
+    age: 65
   output:
     mo_pension_and_ss_or_ssd_deduction_section_c: 5_000
 
-- name: AGI above threshold, private pension income, without taxable social security income, single
+- name: AGI above threshold, without taxable social security income, single, age 65
   period: 2021
   absolute_error_margin: 0
   input:
     mo_adjusted_gross_income: 95_000
     taxable_social_security: 0
     filing_status: SINGLE
     state_code: MO
+    age: 65
   output:
     mo_pension_and_ss_or_ssd_deduction_section_c: 0.0
 
-- name: AGI above threshold, private pension income, taxable social security income, joint
+- name: AGI above threshold, taxable social security income, joint, age 65
   period: 2021
   absolute_error_margin: 0
   input:
     mo_adjusted_gross_income: 105_000
     taxable_social_security: 10_000
     filing_status: JOINT
     state_code: MO
+    age: 65
   output:
     mo_pension_and_ss_or_ssd_deduction_section_c: 5_000
 
-- name: AGI above threshold, private pension income, without taxable social security income, joint
+- name: AGI above threshold, without taxable social security income, joint, age 65
   period: 2021
   absolute_error_margin: 0
   input:
     mo_adjusted_gross_income: 105_000
     taxable_social_security: 0
     filing_status: JOINT
     state_code: MO
+    age: 65
   output:
     mo_pension_and_ss_or_ssd_deduction_section_c: 0.0
 
-- name: AGI below threshold, private pension income, taxable social security income, single
-  period: 2021
+- name: 2024 No Income Threshold Applies, age 65
+  period: 2024
   absolute_error_margin: 0
   input:
-    mo_adjusted_gross_income: 30_000
-    taxable_social_security: 5_000 
-    filing_status: SINGLE
-    state_code: MO
-  output:
-    mo_pension_and_ss_or_ssd_deduction_section_c: 5_000
-
-- name: AGI below threshold, private pension income, without taxable social security income, single
-  period: 2021
-  absolute_error_margin: 30_000
-  input:
-    mo_adjusted_gross_income: 30_000
-    taxable_social_security: 0 
-    filing_status: SINGLE
+    mo_adjusted_gross_income: 105_000
+    taxable_social_security: 10_000
+    filing_status: JOINT
     state_code: MO
+    age: 65
   output:
-    mo_pension_and_ss_or_ssd_deduction_section_c: 0.0
+    mo_pension_and_ss_or_ssd_deduction_section_c: 10_000
 
-- name: AGI above threshold, private pension income, taxable social security income, single
-  period: 2021
-  absolute_error_margin: 0
-  input:
-    mo_adjusted_gross_income: 95_000
-    taxable_social_security: 15_000 
-    filing_status: SINGLE
-    state_code: MO
-  output:
-    mo_pension_and_ss_or_ssd_deduction_section_c: 5_000
+# Age requirement tests - SS requires age 62+, SSDI has no age limit
 
-- name: AGI above threshold, private pension income, without taxable social security income, single
-  period: 2021
+- name: Age 61 with regular SS - no deduction (under age threshold)
+  period: 2024
   absolute_error_margin: 0
   input:
-    mo_adjusted_gross_income: 95_000
-    taxable_social_security: 0 
+    mo_adjusted_gross_income: 50_000
+    social_security_retirement: 20_000
+    taxable_social_security: 10_000
     filing_status: SINGLE
     state_code: MO
+    age: 61
   output:
     mo_pension_and_ss_or_ssd_deduction_section_c: 0.0
 
-- name: AGI above threshold, private pension income, taxable social security income, joint
-  period: 2021
+- name: Age 62 with regular SS - full deduction (meets age threshold)
+  period: 2024
   absolute_error_margin: 0
   input:
-    mo_adjusted_gross_income: 105_000
-    taxable_social_security: 10_000 
-    filing_status: JOINT
+    mo_adjusted_gross_income: 50_000
+    social_security_retirement: 20_000
+    taxable_social_security: 10_000
+    filing_status: SINGLE
     state_code: MO
+    age: 62
   output:
-    mo_pension_and_ss_or_ssd_deduction_section_c: 5_000
+    mo_pension_and_ss_or_ssd_deduction_section_c: 10_000
 
-- name: AGI above threshold, private pension income, without taxable social security income, joint
-  period: 2021
+- name: Age 61 with SSDI - full deduction (no age limit for disability)
+  period: 2024
   absolute_error_margin: 0
   input:
-    mo_adjusted_gross_income: 105_000
-    taxable_social_security: 0 
-    filing_status: JOINT
+    mo_adjusted_gross_income: 50_000
+    social_security_disability: 20_000
+    taxable_social_security: 10_000
+    filing_status: SINGLE
     state_code: MO
+    age: 61
   output:
-    mo_pension_and_ss_or_ssd_deduction_section_c: 0.0
+    mo_pension_and_ss_or_ssd_deduction_section_c: 10_000
 
-- name: 2024 No Income Threshold Applies
+- name: Age 55 with mixed SS and SSDI - only SSDI portion deductible
   period: 2024
-  absolute_error_margin: 0
+  absolute_error_margin: 0.1
   input:
-    mo_adjusted_gross_income: 105_000
-    taxable_social_security: 10_000 
-    filing_status: JOINT
+    mo_adjusted_gross_income: 50_000
+    social_security_retirement: 10_000
+    social_security_disability: 10_000
+    taxable_social_security: 10_000
+    filing_status: SINGLE
     state_code: MO
+    age: 55
   output:
-    mo_pension_and_ss_or_ssd_deduction_section_c: 10_000
+    # 50% of SS is SSDI, so 50% of taxable SS is deductible
+    mo_pension_and_ss_or_ssd_deduction_section_c: 5_000

policyengine_us/variables/gov/states/mo/tax/income/deductions/mo_pension_and_ss_or_ssd_deduction_section_c.py

@@ -4,12 +4,11 @@
 class mo_pension_and_ss_or_ssd_deduction_section_c(Variable):
     value_type = float
     entity = Person
-    label = "Missouri Pension and Social Security or SS Disability Deduction"
+    label = "Missouri Social Security or SS Disability Deduction (Section C)"
     unit = USD
     definition_period = YEAR
     reference = (
-        "https://dor.mo.gov/forms/MO-A_2021.pdf#page=3",
-        "https://dor.mo.gov/forms/MO-1040%20Fillable%20Calculating_2021.pdf#page=2",
+        "https://dor.mo.gov/forms/MO-A_2024.pdf#page=3",
         "https://revisor.mo.gov/main/OneSection.aspx?section=143.124",
     )
     defined_for = StateCode.MO
@@ -18,22 +17,56 @@ def formula(person, period, parameters):
         p = parameters(
             period
         ).gov.states.mo.tax.income.deductions.social_security_and_public_pension
-        ind_taxable_ben = person("taxable_social_security", period)
+
+        # Per MO-A 2024 Section C: SS deduction requires age 62+ by Dec 31;
+        # SSDI has no age limit.
+        age = person("age", period)
+        age_threshold = p.age_threshold
+        meets_age_requirement = age >= age_threshold
+
+        # Get taxable social security (allocated from tax unit calculation)
+        ind_taxable_ss = person("taxable_social_security", period)
+
+        # Calculate the SSDI portion of taxable SS for those under age threshold.
+        # SSDI has no age limit, so we need to determine what portion of
+        # taxable SS is attributable to SSDI.
+        ind_ssdi = person("social_security_disability", period)
+        ind_total_ss = person("social_security", period)
+
+        # Compute SSDI fraction of total SS (avoid divide by zero)
+        ssdi_fraction = np.zeros_like(ind_total_ss)
+        mask = ind_total_ss > 0
+        ssdi_fraction[mask] = ind_ssdi[mask] / ind_total_ss[mask]
+
+        # Taxable SSDI is the SSDI fraction of taxable SS
+        ind_taxable_ssdi = ind_taxable_ss * ssdi_fraction
+
+        # For age 62+: full taxable SS is deductible
+        # For under 62: only taxable SSDI portion is deductible
+        eligible_taxable_benefits = where(
+            meets_age_requirement, ind_taxable_ss, ind_taxable_ssdi
+        )
+
         if p.income_threshold_applies:
+            # Pre-2024: Apply income-based phase-out
             tax_unit = person.tax_unit
             ind_mo_agi = person("mo_adjusted_gross_income", period)
             unit_mo_agi = tax_unit.sum(ind_mo_agi)
             filing_status = tax_unit("filing_status", period)
             unit_allowance = p.mo_ss_or_ssd_deduction_allowance[filing_status]
             unit_agi_over_allowance = max_(0, unit_mo_agi - unit_allowance)
-            unit_taxable_ben = tax_unit.sum(ind_taxable_ben)
+            unit_eligible_ben = tax_unit.sum(eligible_taxable_benefits)
             unit_deduction = max_(
-                0, unit_taxable_ben - unit_agi_over_allowance
+                0, unit_eligible_ben - unit_agi_over_allowance
+            )
+            # Compute individual's share of tax unit deduction
+            ind_frac = np.zeros_like(eligible_taxable_benefits)
+            ben_mask = eligible_taxable_benefits > 0
+            ind_frac[ben_mask] = (
+                eligible_taxable_benefits[ben_mask]
+                / unit_eligible_ben[ben_mask]
             )
-            # Compute the individual's share of the tax unit's taxable benefits.
-            # Use a mask rather than where to avoid a divide-by-zero warning. Default to zero.
-            ind_frac = np.zeros_like(ind_taxable_ben)
-            mask = ind_taxable_ben > 0
-            ind_frac[mask] = ind_taxable_ben[mask] / unit_taxable_ben[mask]
             return ind_frac * unit_deduction
-        return ind_taxable_ben
+
+        # 2024+: No income threshold, full eligible benefits are deductible
+        return eligible_taxable_benefits