Apply Iowa, Kansas, Louisiana and Maryland rules for a filer who can be claimed as a dependent

[MaxGhenis]

Summary

Iowa, Kansas, Louisiana and Maryland each have rules for a filer who can be claimed as a dependent on another return that the model never applied. A return on which the filer (or, if joint, either spouse) can be claimed has no dependents unless the would-be claimant meets the filing exception (IRC 152(b)(1); Publication 501: "you and your spouse can't claim any dependents on your joint return"), and these states also have their own rules for the claimable or claimed filer. This PR applies the ones the federal fixes do not already cover. Each rule is symmetric between head and spouse and reads the fact its law names, using #10024's split inputs:

• IRC 152(b)(1) "no dependents" rules read head_or_spouse_is_dependent_elsewhere_without_filing_exception, as the federal formulas do.
• Rules whose text says "claimed" read the claim (claimed_as_dependent_on_another_return).
• Maryland's filing status 6 ("Any person who can be claimed") reads claimability.

It also fixes one related error in the same formulas (last row of the table). Kentucky needs no code change.

Stacked on the federal claimable-filer PR #10087 (claimable-filer-federal, merged in at 35a2cbc) and on #10024. The 2026-10-09 audit (Subfleet research, sweep_s2) was written before those changes. The rows they already fix are listed below, with the YAML cases that now pin them.

Formula	Rule now (fact read)	Source
ia_exemption_credit	No $40 dependent credits on a return with a claimable filer, outside the filing exception; each filer keeps the personal credit	Iowa Code 422.12(1)(a), (2)(a)(3): "Dependent" has its Internal Revenue Code meaning; 2025 IA 1040 instructions: "You may claim a $40 personal exemption credit even if you are claimed as a dependent", and the dependents "you are claiming for federal income tax purposes"
ia_is_tax_exempt (+ new parameters tax_exempt/dependent/income_limit, income_sources)	A claimed single filer is exempt only with income below $5,000 (line 26 net income through 2022; line 4 Iowa taxable income, without add-backs, from 2023). Any other return with a claimed filer (joint, head of household, surviving spouse, married filing separately) is not exempt	2021-2025 instructions (2021, 2022, 2023, 2024, 2025): "less than $5,000 and you are claimed as a dependent"; other statuses: "You are not claimed as a dependent on another person's Iowa return"
ia_reduced_tax	No tax reduction for a claimed single filer	Tax Reduction Worksheet: "Single taxpayers, who are not claimed as a dependent on another person's Iowa tax return" (2025 p.18)
ks_count_exemptions (2021-2023)	Zero when either filer is claimed; otherwise dependents only outside a claimable filer (152(b)(1))	K-40 instructions 2021-2023, p.6: "If you are claimed as a dependent by another taxpayer, enter '0' in the Total Kansas exemptions box"
ks_exemptions (2024+)	The filing-status allowance stays; no $2,320 dependent exemptions on a return with a claimable filer, outside the filing exception	K.S.A. 79-32,121b: "for each dependent for which such taxpayer is entitled to a deduction ... for federal income tax purposes"; 2024 K-40 p.6: "enter '0' in the number of dependents box"; KDOR FAQ: a claimable taxpayer "will qualify for the personal exemption allowance of $9,160"
ks_fstc (2021-2024)	Exemptions as on K-40 Line E: zero for a claimed filer through 2023, the filing-status count in 2024; no dependent or dependent-child route on a return with a claimable filer, outside the filing exception	K-40 Line E: "Enter your total number of exemptions"; the child must be claimed "as a personal exemption"
la_dependents_exemption (2021-2024)	No dependent exemption on a return with a claimable filer, outside the filing exception; own exemptions unchanged	IT-540 instructions: Line 6C "dependents claimed on your federal return"; Line 6A "even if someone else claimed you"
md_personal_exemptions_count (new), md_total_personal_exemptions	An exemption for each filer who is not claimable, plus dependents only outside a claimable filer (152(b)(1), with the exception); counted locally, not from federal exemptions_count	Tax-General 10-211(a)-(b); 2025 Resident Booklet p.12, filing status 6: "You do not get an exemption for yourself ... You and your spouse must file separate returns"; Instruction 8 (p.13): "Each spouse must claim their own personal exemption" and may split "the overall number of dependents"
md_aged_dependent_exemption	None on a return with a claimable filer, outside the filing exception	10-211(b)(2): "each dependent, as defined in § 152" who is 65 or older
federal_eitc_without_age_minimum	The childless route also needs no claimable filer outside the filing exception, as in eitc_demographic_eligible	10-704: only "the minimum age requirement" is waived; booklet p.22: "otherwise eligible for the federal credit"; IRC 32(c)(1)(A)(ii)(III); Publication 596
md_ctc, md_ctc_eligible	No qualified child on a return with a claimable filer, outside the filing exception	10-751(a)(2)(i): "a dependent for purposes of § 152"
is_eligible_md_poverty_line_credit, md_poverty_line_credit_potential, md_local_poverty_line_credit (+ new md_poverty_line_credit_earned_income, md_poverty_line_credit_income_level)	No credit when every filer is claimable (filing status 6, whatever the filing exception). On a joint return with one claimable spouse, it uses the other spouse's own earned income and the poverty level for that spouse's exemptions	10-709(a)(2): the poverty level "that corresponds to the number of exemptions which the individual is allowed and claims under § 10-211(b)(1)"; (a)(3)(iii); booklet p.23: "not eligible ... if you checked filing status 6"
md_aged_dependent_exemption (related fix)	Limited by federal AGI like every other (b)(1)-(2) exemption: $1,600/$800/$0 above $100,000 ($150,000 joint)	10-211(c): "the amount allowed for each exemption under subsection (b)(1) or (2)"; booklet chart: "This reduction applies to the additional dependency exemptions as well"

The Iowa, Kansas and Maryland dependent-exemption contrib reforms and the state dependent exemption repeal keep these rules (YAML cases added). In repeal_state_dependent_exemptions.py this PR changes only the Maryland and Kansas entries and lands first in that file's order: this PR, then #10043, then #10053.

Audit rows already fixed by #10024 or the federal branch (not changed here)

• IA: EITC (federal eitc) and care credit (cdcc_potential). Pinned in ia_eitc.yaml and ia_cdcc.yaml.
• KS: EITC (eitc) and care credit (cdcc). Pinned in ks_total_eitc.yaml and ks_cdcc.yaml.
• KY: care credit and tuition credit.
  • The care credit reads cdcc, and from 2026 pre_obbba_cdcc. Both are built on cdcc_relevant_expenses, which now reads cdcc_qualifying_childcare_expenses, capped by cdcc_limit from capped_count_cdcc_eligible. Pinned in ky_cdcc_potential.yaml.
  • The tuition credit reads the federal AOC/LLC, barred when either filer is claimed.
  • The family size credit already keeps qualifying children under 152(c) ("even if you are claimed as a dependent").
• LA: EITC (eitc), refundable and nonrefundable care credits (cdcc_potential, cdcc), and through them the school readiness credit. Pinned in la_eitc.yaml and la_refundable_cdcc.yaml.
• MD: care credit (cdcc), dependent care subtraction (count_cdcc_eligible, cdcc_relevant_expenses) and local EITC (eitc). The subtraction is pinned in md_dependent_care_subtraction.yaml.

Each claim was verified by reading the formula on this branch. No tax formula in these five states reads raw childcare expenses; the raw-expense readers are the CCAP and TANF benefit programs.

Maryland's separate returns: how far this models them

Maryland requires a married filer who can be claimed to file separate Maryland returns (filing status 6 for that spouse). The model keeps the federal joint tax unit and applies each rule per filer where the rule is per filer:

• Exemptions: each filer who cannot be claimed gets their own; the spouses split the federal return's dependents, of which it has none outside the filing exception.
• Poverty line credit: computed on the other spouse's earnings and poverty level.
• EITC and CTC: no childless EITC and no qualified child.

It does not compute two separate Maryland returns. These still use the joint unit:

• filing status;
• the standard deduction;
• the Schedule I rates;
• each spouse's own AGI for the exemption phase-down;
• the poverty line credit's AGI test and tax limit;
• the EITC split ("a combined total of up to one-half the federal credit").

A married person can be claimed only if the couple's joint return is "filed only to claim a refund of withheld income tax or estimated tax paid" (Publication 501), so these are low-income couples. From 2025 the two separate flat standard deductions sum to the joint one ($3,350 x 2 = $6,700), but the separate rate schedules can still give a different tax. Computing the two returns needs each spouse's income as on a separate federal return (Instruction 8), a split the Maryland model does not have.

Review r1 (Sol, at 704a604): responses

1. Should-fix: Maryland exemptions followed a federal-only reform. Fixed. Maryland counts its own exemptions in md_personal_exemptions_count, with the same rule as the federal count, and both md_total_personal_exemptions and md_poverty_line_credit_income_level read it. The federal repeal_dependent_exemptions reform no longer reaches Maryland.
2. Should-fix: the changelog left out the aged dependent AGI limit. Fixed; the fragment names it.
3. Nit: invariant 5 was untested, and max_examples was 2. The property test now checks the nobody-claimable identities: the Maryland count equals tax_unit_size, the poverty earned income equals eitc_earned_income, the poverty level equals tax_unit_fpg, and Louisiana pays $1,000 per dependent. max_examples is now 3, and a filing-exception scope test is added. The microsim diff covers the rest.
4. Nit: Iowa wording and anchors. The body now names every non-single status. The 2021 anchor is page 38 in the code too. 422.13(1)(a) is labelled as the filing requirement it is.
5. Nit: no Louisiana 2023 reference. Added.
6. Nit: duplicated earned income sources. Kept, with a comment pointing to eitc_earned_income. Sharing the list would mean changing the federal variable.

Readings for Max (for the US + core hub to batch)

1. Kansas 2021-2023 exemptions. This PR follows the K-40 ("If you are claimed ... enter '0' in the Total Kansas exemptions box"), so an actual claim on either spouse gives $0. The statute (79-32,121: "for each exemption for which such individual is entitled to a deduction ... for federal income tax purposes") would turn instead on claimability (IRC 151(d)(2)) and read per person. That keeps the other spouse's exemption ($2,250, matching the federal exemptions_count) and drops a claimable-but-unclaimed filer's own.
2. Kansas food sales tax credit, 2021-2024. This PR follows K-40 Line E: a claimed filer gets $0 through 2023 and keeps the filing-status count in 2024 ($125 single, $250 joint). The statute (79-32,271: "every exemption claimed on the taxpayer's federal income tax return") gives $0 for a claimable single filer in 2024 and $125 for a joint return with one claimable spouse.
3. Iowa low-income exemption: the claimer's income and the Iowa return. Iowa Code 422.5(2)-(3) denies the benefit to a claimed person only "if the person claiming the dependent has net income exceeding" the limit, and the instructions speak of a claim "on another person's Iowa return". The model has no input for the claimer's income or for the state of the claimer's return. So this PR follows the instructions and reads any claim. Alternative: inputs for both.
4. Iowa alternate tax. 422.5(2)(b) sits in the same subsection whose "benefit" a claimed person loses, but the alternate tax instructions repeat no dependent bar. Not changed here: a joint return with a claimed spouse keeps the alternate tax. Alternative: deny it as well.
5. Maryland dependents on separate returns. This PR reads Instruction 8's "overall number of dependents" as the federal joint return's, which has none outside the filing exception. That covers the exemptions, the aged dependent exemption and the CTC. Alternative: a pro forma separate federal return for the spouse who cannot be claimed, on which 152(b)(1) would not bar dependents.
6. Maryland separate returns (section above): per-filer rules on the joint unit (this PR) vs a full two-return computation.
7. Louisiana school readiness credit, incapable child. Left to follow the Louisiana care credit, which keeps a disabled qualifying person under IRC 21(b)(1)(B). Alternative: R.S. 47:6104's "qualified dependent" bars it when the filer can be claimed.

Not modeled (listed, not implemented)

• IA: early childhood development credit and tuition/textbook credit (per dependent, 422.12(2)(b), 422.12C(2)); rent reimbursement program ("not ... claimed as a dependent").
• KS: 2025+ additional newborn allowance and stillbirth exemption; the homestead refund's dependent-child route.
• LA: school tuition, homeschool and public-school expense deductions (claimed dependents, current or preceding year).
• MD: 2021 RELIEF Act payment (excluded "Persons claimed as a dependent").

Other findings (not fixed here)

• ks_fstc 2021-2023 leaves out the head of household extra exemption that K-40 Line E ("total number of exemptions") would include. The 2024 instructions exclude it explicitly: "Head of Household is not allowed an additional exemption for food sales tax credit".
• federal_eitc_without_age_minimum omits the federal separate-filer and section 911 conditions that eitc_eligible applies.
• In repeal_state_dependent_exemptions, the overrides for other states (HI, OH, RI, VT, VA, WV and others) are left to the hub's repeal-state-dep-exemptions-claimable-filer branch, Apply New Jersey, North Dakota, Ohio, Oklahoma and Pennsylvania rules for a filer who can be claimed as a dependent #10043 and Apply Arizona, Arkansas and California rules for a filer who can be claimed as a dependent #10053.

Invariants

1. Swap invariance. Every changed output, and each of the five states' income taxes, is the same under either head/spouse labelling.

2. Monotonicity. Marking another filer as claimed never raises:

   • the dependent-based amounts;
   • the Kansas exemptions and food sales tax credit;
   • the Maryland exemption count and amount, CTC, pro forma EITC and poverty-credit earned income.

   Left out by design:

   • Taxes and the Iowa exemption: a claimed single filer's $5,000 test uses a different income measure, so it can newly exempt.
   • Maryland's poverty line credit amounts: they rise when lost exemptions raise the tax they offset.

   The poverty earned income holds only for non-negative self-employment income. On separate returns a claimable spouse's loss no longer offsets the other's earnings, which is intended.

3. Identities. With a filer claimable outside the filing exception: no Louisiana dependent exemption, no Maryland aged dependent exemption or CTC, and no pro forma EITC without a child. With every filer claimable: no poverty line credit.

4. Differential. Wherever the federal EITC's eligibility holds, Maryland's federal_eitc_without_age_minimum equals the federal credit before take-up and filing.

5. Unchanged when nobody can be claimed. The Maryland count equals tax_unit_size. The poverty earned income and poverty level equal eitc_earned_income and tax_unit_fpg. Louisiana pays $1,000 per dependent. The microsim diff covers the rest; the only exception is the aged dependent AGI fix.

6. Filing-exception scope. The exception never lowers the 152(b)(1) amounts. It does not change Iowa's exemption (an actual-claim rule) or Maryland's poverty earned income (a claimability rule).

Tests

• YAML. Variable-named cases cover every changed formula and the inherited state readers above:

  • a single claimable filer, with an unclaimed single control where it differs;
  • a joint return with one claimable spouse, under both head/spouse labellings;
  • a joint return with both spouses claimable;
  • a joint return with nobody claimable;
  • claimable-but-unclaimed cases for the actual-claim rules;
  • filing-exception cases for the 152(b)(1) rules.

  Expected values are computed from the law and the repository parameters, with the arithmetic in each case's comments. Results: pending (queued behind the shared heavy lock).

• Property test. policyengine_us/tests/core/test_claimable_filer_ia_ks_ky_la_md_invariants.py checks invariants 1-6 with Hypothesis (claimable, claimed and filing-exception draws), a seeded population in the five states for 2022, 2024 and 2026, and an exception-scope population for 2022 and 2025. Results: pending.

Microsimulation impact

Pending: default dataset, 2025 and 2026, claimable-filer-federal (35a2cbc) vs this branch. The dataset sets the dependency flags for nobody, so only the Maryland aged dependent AGI limit can move totals.

axiom: Iowa Code 422.12(1)(a),(2)(a)(3), 422.5(2)(a),(3)(a), 422.13(1)(a) queued (draft IA1) | K.S.A. 79-32,121, 79-32,121b queued (draft KS1) | K.S.A. 79-32,271 n/a: expired after 2024 and unencoded | Louisiana 2021-2024 dependent exemption n/a: expired and unencoded | Md. Tax-General 10-211, 10-704(c)(3), 10-709, 10-751 queued (draft MD1) | IRC 32 childless pro forma path queued (draft F1 addendum) | state readers of the federal EITC and CDCC (Iowa 422.12B/C, Kansas EITC/CDCC, KRS 141.067/.069, R.S. 47:297.4/.8 and 47:6104, Md. 10-716/10-208(e)) queued as F1 downstream companions | contrib reforms n/a: PE-only reform. Drafts held for Max's go, not filed (claimable-filer-rules/axiom/axiom-parity-ia-ks-ky-la-md.md plus the split-input addendum). No module on rulespec-us origin/main (16a6677190) derives claimability or tests a claimable filer.

🤖 Generated with Claude Code