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

changelog.d/claimable-filer-ia-ks-ky-la-md.fixed.md

@@ -0,0 +1 @@
+Apply Iowa, Kansas, Louisiana and Maryland rules for a filer who can be claimed as a dependent: no dependent exemptions or credits on a return with a claimable filer outside the claimant filing exception (Iowa dependent credit, Kansas dependent exemption and food sales tax credit child, Louisiana dependent exemption, Maryland dependent and aged-dependent exemptions and child tax credit); a claimed Iowa filer gets the low-income exemption only as a single filer with income below $5,000, and no tax reduction; a claimed Kansas filer has no exemptions in 2021-2023; a Maryland filer who can be claimed gets no personal exemption, poverty line credit or childless EITC, and the poverty line credit stays for a spouse who cannot be claimed. Also limit Maryland's aged dependent exemption by federal AGI under Tax-General 10-211(c), as for the personal exemption.

policyengine_us/parameters/gov/states/ia/tax/income/tax_exempt/dependent/income_limit.yaml

@@ -0,0 +1,21 @@
+description: Iowa exempts a single filer who can be claimed as a dependent on another return from income tax when that filer's income is below this amount.
+values:
+  2021-01-01: 5_000
+
+metadata:
+  label: Iowa tax exemption income limit for single filers claimed as dependents
+  period: year
+  unit: currency-USD
+  reference:
+  - title: Iowa Code 422.13(1)(a), filing requirement for a claimed dependent
+    href: https://www.legis.iowa.gov/docs/code/2026/422.pdf#page=46
+  - title: 2021 IA1040 Income Tax Return instructions
+    href: https://revenue.iowa.gov/media/2650/download?inline#page=38
+  - title: 2022 IA1040 Income Tax Return instructions
+    href: https://revenue.iowa.gov/media/2721/download?inline#page=37
+  - title: 2023 IA 1040 Income Tax Return instructions
+    href: https://revenue.iowa.gov/media/2811/download?inline#page=12
+  - title: 2024 IA 1040 Income Tax Return instructions
+    href: https://revenue.iowa.gov/media/4152/download?inline#page=10
+  - title: 2025 IA 1040 Income Tax Return instructions
+    href: https://revenue.iowa.gov/media/4435/download?inline#page=11

policyengine_us/parameters/gov/states/ia/tax/income/tax_exempt/dependent/income_sources.yaml

@@ -0,0 +1,24 @@
+description: Iowa compares this income of a single filer who can be claimed as a dependent on another return with the dependent tax exemption limit.
+values:
+  # Net income from all sources, IA 1040 line 26.
+  2021-01-01:
+    - ia_net_income
+  # Iowa taxable income, IA 1040 line 4, without adding back deductions.
+  2023-01-01:
+    - ia_taxable_income_consolidated
+
+metadata:
+  unit: list
+  period: year
+  label: Iowa tax exemption income sources for single filers claimed as dependents
+  reference:
+  - title: 2021 IA1040 Income Tax Return instructions
+    href: https://revenue.iowa.gov/media/2650/download?inline#page=38
+  - title: 2022 IA1040 Income Tax Return instructions
+    href: https://revenue.iowa.gov/media/2721/download?inline#page=37
+  - title: 2023 IA 1040 Income Tax Return instructions
+    href: https://revenue.iowa.gov/media/2811/download?inline#page=12
+  - title: 2024 IA 1040 Income Tax Return instructions
+    href: https://revenue.iowa.gov/media/4152/download?inline#page=10
+  - title: 2025 IA 1040 Income Tax Return instructions
+    href: https://revenue.iowa.gov/media/4435/download?inline#page=11

policyengine_us/reforms/state_dependent_exemptions/repeal_state_dependent_exemptions.py

@@ -34,10 +34,13 @@ class md_total_personal_exemptions(Variable):
         defined_for = StateCode.MD
 
         def formula(tax_unit, period, parameters):
-            # Get md_personal_exemption from tax_unit multiplied by tax_unit_size
+            # Only the filers' own exemptions remain; a filer who can be
+            # claimed as a dependent has none (filing status 6).
             md_personal_exemption = tax_unit("md_personal_exemption", period)
-            tax_unit_size = tax_unit("head_spouse_count", period)
-            return md_personal_exemption * tax_unit_size
+            own_exemptions = tax_unit(
+                "head_spouse_count_not_dependent_elsewhere", period
+            )
+            return md_personal_exemption * own_exemptions
 
     class mi_personal_exemptions(Variable):
         value_type = float
@@ -351,6 +354,11 @@ def formula(tax_unit, period, parameters):
             joint = filing_status == statuses.JOINT
             hoh = filing_status == statuses.HEAD_OF_HOUSEHOLD
             adults = where(joint | hoh, 2, 1)
+            # A filer who is claimed as a dependent enters "0" exemptions.
+            person = tax_unit.members
+            filer = person("is_tax_unit_head_or_spouse", period)
+            claimed = person("claimed_as_dependent_on_another_return", period)
+            adults = where(tax_unit.any(filer & claimed), 0, adults)
             return adults * p.consolidated.amount + veterans_exemption_amount
 
     class ma_income_tax_exemption_threshold(Variable):

policyengine_us/reforms/states/ia/dependent_credit/ia_dependent_credit_reform.py

@@ -38,7 +38,12 @@ def formula(tax_unit, period, parameters):
             # dependent is age-eligible, matching the baseline count.
             person = tax_unit.members
             age = person("age", period)
-            is_dependent = person("is_tax_unit_dependent", period)
+            # A return on which the filer (or, if joint, either spouse) can be
+            # claimed as a dependent has no dependents (IRC 152(b)(1)), unless
+            # the would-be claimant meets the filing exception (Publication 501).
+            is_dependent = person("is_tax_unit_dependent", period) & ~person.tax_unit(
+                "head_or_spouse_is_dependent_elsewhere_without_filing_exception", period
+            )
             if c.age_limit.in_effect:
                 eligible = is_dependent & (age < c.age_limit.threshold)
             else:

policyengine_us/reforms/states/ks/dependent_exemption/ks_dependent_exemption_reform.py

@@ -15,7 +15,12 @@ def formula(tax_unit, period, parameters):
 
             person = tax_unit.members
             age = person("age", period)
-            is_dependent = person("is_tax_unit_dependent", period)
+            # A return on which the filer (or, if joint, either spouse) can be
+            # claimed as a dependent has no dependents (IRC 152(b)(1)), unless
+            # the would-be claimant meets the filing exception (Publication 501).
+            is_dependent = person("is_tax_unit_dependent", period) & ~person.tax_unit(
+                "head_or_spouse_is_dependent_elsewhere_without_filing_exception", period
+            )
 
             # Apply age limit if in effect.
             if p.age_limit.in_effect:

policyengine_us/reforms/states/md/dependent_exemption/md_dependent_exemption_reform.py

@@ -14,7 +14,12 @@ def formula(tax_unit, period, parameters):
             p = parameters(period).gov.contrib.states.md.dependent_exemption
             person = tax_unit.members
             age = person("age", period)
-            is_dependent = person("is_tax_unit_dependent", period)
+            # A return on which the filer (or, if joint, either spouse) can be
+            # claimed as a dependent has no dependents (IRC 152(b)(1)), unless
+            # the would-be claimant meets the filing exception (Publication 501).
+            is_dependent = person("is_tax_unit_dependent", period) & ~person.tax_unit(
+                "head_or_spouse_is_dependent_elsewhere_without_filing_exception", period
+            )
             if p.age_limit.in_effect:
                 eligible = is_dependent & (age < p.age_limit.threshold)
             else:
@@ -97,7 +102,12 @@ class md_older_dependents_count(Variable):
 
         def formula(tax_unit, period, parameters):
             person = tax_unit.members
-            is_dependent = person("is_tax_unit_dependent", period)
+            # A return on which the filer (or, if joint, either spouse) can be
+            # claimed as a dependent has no dependents (IRC 152(b)(1)), unless
+            # the would-be claimant meets the filing exception (Publication 501).
+            is_dependent = person("is_tax_unit_dependent", period) & ~person.tax_unit(
+                "head_or_spouse_is_dependent_elsewhere_without_filing_exception", period
+            )
             total_dependents = tax_unit.sum(is_dependent)
             eligible = tax_unit("md_eligible_dependents_count", period)
             return max_(0, total_dependents - eligible)
@@ -112,12 +122,15 @@ class md_total_personal_exemptions(Variable):
 
         def formula(tax_unit, period, parameters):
             # Personal portion keeps the baseline per-person (AGI-stepped)
-            # amount; dependents are separated out.
+            # amount; dependents are separated out. These are the filers' own
+            # exemptions (none for a filer who can be claimed as a dependent)
+            # plus over-age dependents.
             per_person = tax_unit("md_personal_exemption", period)
-            tax_unit_size = tax_unit("tax_unit_size", period)
-            dependents = tax_unit("tax_unit_dependents", period)
+            own_exemptions = tax_unit(
+                "head_spouse_count_not_dependent_elsewhere", period
+            )
             older_dependents = tax_unit("md_older_dependents_count", period)
-            personal_count = tax_unit_size - dependents + older_dependents
+            personal_count = own_exemptions + older_dependents
             personal_amount = personal_count * per_person
 
             dependent_exemption_amount = tax_unit("md_dependent_exemption", period)

policyengine_us/tests/core/test_claimable_filer_ia_ks_ky_la_md_invariants.py

@@ -0,0 +1,220 @@
+"""Iowa, Kansas, Kentucky, Louisiana and Maryland rules for a filer who can be
+claimed as a dependent.
+
+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), so these states' dependent exemptions and credits,
+Kansas's food sales tax credit child route, Maryland's child tax credit and the
+childless pro forma EITC follow that test. Iowa's low-income exemption and tax
+reduction and Kansas's 2021-2023 exemptions turn on an actual claim; Maryland's
+own exemption and poverty line credit turn on claimability (filing status 6).
+
+For couples drawn by Hypothesis (claimable, claimed and filing-exception
+patterns) and a seeded population in these states:
+
+1. Swap invariance: each output is the same under either head/spouse
+   labelling.
+2. Monotonicity: marking another filer as claimed never raises the amounts in
+   MONOTONE. This holds for the drawn inputs, which have no self-employment
+   losses: on separate Maryland returns a claimable spouse's loss no longer
+   offsets the other spouse's earnings, which is intended.
+3. Identities: with a filer claimable outside the filing exception there is no
+   Louisiana dependent exemption, Maryland aged dependent exemption or child
+   tax credit, and no pro forma federal EITC without a child; with every filer
+   claimable, no poverty line credit.
+4. Differential: wherever the federal EITC's eligibility holds, Maryland's
+   pro forma federal EITC without the minimum age equals the federal credit
+   before take-up and filing.
+5. Unchanged when nobody can be claimed: Maryland's exemption count is the tax
+   unit's size, the poverty line credit's earned income and poverty level are
+   `eitc_earned_income` and `tax_unit_fpg`, and Louisiana's dependent
+   exemption is $1,000 per dependent.
+6. Filing exception scope: the exception never lowers the 152(b)(1) amounts in
+   EXCEPTION_RESTORES and does not change the claimability and actual-claim
+   rules in EXCEPTION_NEUTRAL.
+"""
+
+import numpy as np
+import pytest
+from hypothesis import HealthCheck, given, settings
+from hypothesis import strategies as st
+
+from policyengine_us import Simulation
+from policyengine_us.tests.core.test_claimable_filer_federal_invariants import (
+    check_monotone,
+    check_swap,
+)
+from policyengine_us.tests.core.test_dependent_elsewhere_head_spouse_swap_invariance import (
+    CLAIM_PATTERNS,
+    TOLERANCE,
+    _calc,
+    _crafted_cases,
+    _exception_variants,
+    _seeded_couples,
+    _situation,
+    adults,
+    dependents,
+)
+
+STATES = ["IA", "KS", "KY", "LA", "MD"]
+# 2022: Iowa's net-income path, Kansas's exemption count and Louisiana's
+# exemptions; 2024: Iowa's consolidated path and Kansas's filing-status
+# allowance; 2026: Louisiana's flat tax and Maryland's child tax credit
+# phase-out.
+YEARS = [2022, 2024, 2026]
+MONOTONE = [
+    "ia_exemption_credit",
+    "ks_exemptions",
+    "ks_fstc",
+    "la_dependents_exemption",
+    "md_personal_exemptions_count",
+    "md_total_personal_exemptions",
+    "md_aged_dependent_exemption",
+    "federal_eitc_without_age_minimum",
+    "md_ctc",
+    "md_poverty_line_credit_earned_income",
+]
+OUTPUTS = MONOTONE + [
+    "ia_is_tax_exempt",
+    "ia_income_tax",
+    "ks_income_tax",
+    "ky_income_tax",
+    "la_income_tax",
+    "is_eligible_md_poverty_line_credit",
+    "md_poverty_line_credit",
+    "md_local_poverty_line_credit",
+    "md_income_tax",
+    "state_income_tax",
+]
+# 152(b)(1) amounts that the claimant filing exception restores.
+EXCEPTION_RESTORES = [
+    "ia_exemption_credit",
+    "ks_exemptions",
+    "ks_fstc",
+    "la_dependents_exemption",
+    "md_personal_exemptions_count",
+    "md_aged_dependent_exemption",
+    "federal_eitc_without_age_minimum",
+    "md_ctc",
+]
+# Rules on claimability or an actual claim, which the exception leaves alone.
+EXCEPTION_NEUTRAL = [
+    "ia_is_tax_exempt",
+    "md_poverty_line_credit_earned_income",
+]
+
+
+@st.composite
+def couples(draw):
+    claimable = draw(st.sampled_from(CLAIM_PATTERNS))
+    claimed = tuple(can_claim and draw(st.booleans()) for can_claim in claimable)
+    return {
+        "state": draw(st.sampled_from(STATES)),
+        "adults": [draw(adults()), draw(adults())],
+        "dependents": draw(st.lists(dependents(), max_size=2)),
+        "claimed": claimed,
+        "claimable": claimable,
+        "exception": tuple(
+            not is_claimed and draw(st.booleans()) for is_claimed in claimed
+        ),
+    }
+
+
+def _identities(sim, year):
+    claimable = _calc(sim, "head_or_spouse_is_dependent_elsewhere", year) > 0
+    no_dependents = (
+        _calc(
+            sim, "head_or_spouse_is_dependent_elsewhere_without_filing_exception", year
+        )
+        > 0
+    )
+    every = _calc(sim, "every_filer_is_dependent_elsewhere", year) > 0
+    childless = _calc(sim, "eitc_child_count", year) == 0
+    for name in ["la_dependents_exemption", "md_aged_dependent_exemption", "md_ctc"]:
+        assert not _calc(sim, name, year)[no_dependents].any(), name
+    pro_forma = _calc(sim, "federal_eitc_without_age_minimum", year)
+    assert not pro_forma[no_dependents & childless].any()
+    assert not _calc(sim, "is_eligible_md_poverty_line_credit", year)[every].any()
+    # Each tax unit has its own household, in the same order.
+    state = np.asarray(sim.calculate("state_code_str", year))
+    md, la = state == "MD", state == "LA"
+    # 5. Unchanged when nobody can be claimed.
+    nobody = ~claimable
+    np.testing.assert_array_equal(
+        _calc(sim, "md_personal_exemptions_count", year)[md & nobody],
+        _calc(sim, "tax_unit_size", year)[md & nobody],
+    )
+    np.testing.assert_allclose(
+        _calc(sim, "md_poverty_line_credit_earned_income", year)[md & nobody],
+        _calc(sim, "eitc_earned_income", year)[md & nobody],
+        atol=TOLERANCE,
+    )
+    np.testing.assert_allclose(
+        _calc(sim, "md_poverty_line_credit_income_level", year)[md & nobody],
+        _calc(sim, "tax_unit_fpg", year)[md & nobody],
+        atol=TOLERANCE,
+    )
+    np.testing.assert_allclose(
+        _calc(sim, "la_dependents_exemption", year)[la & nobody],
+        1_000 * _calc(sim, "tax_unit_dependents", year)[la & nobody],
+        atol=TOLERANCE,
+    )
+    # 4. Differential: the federal credit before take-up and filing.
+    federal_eligible = md & (_calc(sim, "eitc_eligible", year) > 0)
+    federal = np.minimum(
+        _calc(sim, "eitc_phased_in", year),
+        np.maximum(
+            0, _calc(sim, "eitc_maximum", year) - _calc(sim, "eitc_reduction", year)
+        ),
+    )
+    np.testing.assert_allclose(
+        pro_forma[federal_eligible], federal[federal_eligible], atol=TOLERANCE
+    )
+
+
+@settings(
+    max_examples=3,
+    deadline=None,
+    derandomize=True,
+    suppress_health_check=[HealthCheck.too_slow, HealthCheck.data_too_large],
+)
+@given(st.sampled_from(YEARS), st.lists(couples(), min_size=6, max_size=12))
+def test_ia_ks_ky_la_md_claimable_filer_rules_are_label_free(year, units):
+    check_swap(units, year, OUTPUTS, _identities)
+
+
+@pytest.mark.parametrize("year", YEARS)
+def test_ia_ks_ky_la_md_claimable_filer_rules_seeded_population(year):
+    units = _seeded_couples(STATES, per_state=3) + _crafted_cases(STATES)
+    check_swap(units, year, OUTPUTS, _identities)
+    check_monotone(units, year, MONOTONE, _identities)
+
+
+@pytest.mark.parametrize("year", [2022, 2025])
+def test_ia_ks_ky_la_md_filing_exception_scope(year):
+    # Each unit runs four times with nobody actually claimed: claimable
+    # without the exception (both labellings), then with it.
+    units = [
+        unit
+        for unit in _seeded_couples(STATES, per_state=3) + _crafted_cases(STATES)
+        if any(unit["claimed"])
+    ]
+    sim = Simulation(situation=_situation(units, year, _exception_variants))
+    for name in EXCEPTION_RESTORES + EXCEPTION_NEUTRAL:
+        copies = _calc(sim, name, year).reshape(-1, 4)
+        np.testing.assert_allclose(
+            copies[:, 0::2], copies[:, 1::2], atol=TOLERANCE, rtol=0
+        )
+        without, with_exception = copies[:, :2], copies[:, 2:]
+        if name in EXCEPTION_NEUTRAL:
+            np.testing.assert_allclose(
+                with_exception,
+                without,
+                atol=TOLERANCE,
+                rtol=0,
+                err_msg=f"The filing exception changes {name}",
+            )
+        else:
+            assert not (with_exception < without - TOLERANCE).any(), (
+                f"The filing exception lowers {name}"
+            )