Apply the federal rules for a filer who can be claimed as a dependent

[MaxGhenis]

Summary

A filer who can be claimed as a dependent on another return is treated as having no dependents (unless the would-be claimant meets the filing exception below), has no personal exemption, and on a joint return either spouse being claimable has the same effect on the couple's dependents (IRS Publication 501, Dependent Taxpayer Test: "If you are filing a joint return and your spouse can be claimed as a dependent by another taxpayer, you and your spouse can't claim any dependents on your joint return"). The model has an input for this, but no formula below read it, so such a return kept its child tax credit, its child care credit for young children, its full exemption count, and its education credits.

Stacked on #10024 (which makes the existing readers label-free and adds the inputs and helpers used here). Base this PR on head-dependent-elsewhere-swap until #10024 merges.

#10024 gives the model three separate facts about a filer, and this stack reads the one each rule turns on:

Fact	Input (#10024)	Rules here that read it
Is claimed on another return	claimed_as_dependent_on_another_return	Education credits (IRC 25A(g)(3): a deduction "is allowed to another taxpayer"; 26 CFR 1.25A-1(f)) and student loan interest (IRC 221(c))
Can be claimed (claimed or not)	claimable_as_dependent_on_another_return (defaults to the input above)	The filer's own exemption (IRC 151(d)(2): "allowable"), recovery rebates (6428(d)(2) "allowable", 6428B(c)(2) "is a dependent"), the tuition deduction (222(c)(3) "may be allowed")
Can be claimed, and the would-be claimant does not meet the filing exception (not required to file, and files no return or only for a refund)	dependent_claimant_filing_exception, through head_or_spouse_is_dependent_elsewhere_without_filing_exception	Everything that needs the filer to have dependents (IRC 152(b)(1); Pub. 501, Dependent Taxpayer Test): the child tax credit, the credit for other dependents, the under-13 care child and its expenses, dependents in exemptions_count, ARPA dependents

Formula	Rule now	Source
ctc_qualifying_child, ctc_adult_individual_maximum	No child tax credit and no credit for other dependents when either filer can be claimed outside the claimant filing exception	IRC 24(a) ("for which the taxpayer is allowed a deduction under section 151"), 24(h)(4)(A) ("each dependent of the taxpayer"), 152(b)(1). Gating only the child amount would turn it into a $500 other-dependent credit, so both are gated.
is_cdcc_eligible, cdcc_qualifying_childcare_expenses (new), cdcc_relevant_expenses	A child under 13 is not a qualifying person when either filer can be claimed outside the claimant filing exception, and the return's childcare expenses then count only if a child is still a qualifying individual (one incapable of self-care); a disabled dependent or spouse still qualifies. The single-parent work requirement reform and California's ca_cdcc_relevant_expenses read the same expense rule	IRC 21(b)(1): (A) "a dependent of the taxpayer"; (B) dependency "determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B)"; 21(b)(2)(A)(ii): expenses "for the care of a qualifying individual"; Pub. 503 p.3
exemptions_count	Filers who cannot be claimed, plus dependents unless a filer can be claimed and the filing exception does not apply (was every tax-unit member)	IRC 151(d)(2), 152(b)(1); 2017 Form 1040 line 6a ("If someone can claim you as a dependent, do not check box 6a") and line 6b instructions. The federal amount is $0 in 2018-2026, so this changes only the states that read the count (below).
rrc_adult_count_with_valid_ssn, rrc_arpa_dependents_with_valid_ssn, rrc_cares, rrc_caa, rrc_arpa (2020-2021 rebates)	A claimable filer is not an eligible individual; such a return has no ARPA dependents outside the claimant filing exception, and a return whose every filer is claimable gets no credit. The Armed Forces exception waives the identification rule only, so it no longer counts a claimable spouse. The CARES and CAA child prerequisite stays "a spouse with a valid SSN", whether or not that spouse is an eligible individual	IRC 6428(d)(2), 6428A(d)(2), 6428B(c)(2), 6428B(e)(2)(E)
tuition_and_fees_deduction_eligible (repealed for 2021 on)	No deduction when either filer can be claimed. Without this, the education-credit bar below would make such a filer eligible	IRC 222(c)(3): no deduction to an individual for whom a section 151 deduction "may be allowed to another taxpayer"
is_barred_from_education_credits_by_dependency (new), is_eligible_for_american_opportunity_credit, is_eligible_for_lifetime_learning_credit	No education credit on a return with a claimed filer; a dependent student is not eligible on a return that cannot claim dependents (IRC 25A(f)(1)(A)(iii) with 152(b)(1)). The reconciliation SSN reform's Lifetime Learning Credit reads the same bar	IRC 25A(g)(3); Form 8863 instructions: "You're claimed as a dependent on another person's tax return"; Form 1040 instructions extend it to "your spouse if filing jointly"
student_loan_interest_ald_eligible	No deduction when either filer is claimed (its comment already said so; the code did not)	IRC 221(c); Form 1040 instructions p.98

State readers of the corrected exemptions_count, each checked against its own law:

State formula	Its law counts	Effect
ri_exemptions	Federal exemptions; "If someone else can claim you on their return, your exemption amount is zero" (RI-1040 2025 p.5)	Follows the corrected count
nm_low_and_middle_income_exemption, nm_low_income_comprehensive_tax_rebate_exemptions	"the number of federal exemptions" (NMSA 7-2-5.8, 7-2-14(C)); PIT-RC line 2a: "the non-qualifying spouse is not eligible"	Follows; the rebate now also needs a filer who cannot be claimed (7-2-14(A)) and returns $0, not the six-exemption amount, for zero exemptions
hi_regular_exemptions	HRS 235-54(a): the exemption of a claimable individual "shall be zero"	The ordinary count follows; the age-65 exemption of a claimable filer is removed in the Oregon-Maine-Hawaii PR
hi_food_excise_exemption_amount, hi_act_115_rebate, hi_low_income_household_renters_tax_credit	Form N-311 and Schedule X count only people who cannot be claimed by another taxpayer	#10024 made these take claimable filers off the count themselves; they now read the corrected count as it is (otherwise a return within the filing exception lost one exemption too many). The renters credit also leaves out a dependent who can be claimed elsewhere, as the food/excise credit already did: two filers and such a child get $100, not $150
de_personal_credit_potential, de_personal_credit_indv	30 Del. C. 1110(b)(1): "$110 for each personal exemption to which such individual is entitled ... for federal income tax purposes"	Follows; the combined-separate allocation no longer gives each spouse a fixed $110 or assumes two filers. Because the dependents' share is now "exemptions beyond the filers' own" (it was "beyond two"), de_personal_credit_indv for a return without a spouse now includes the dependents' credits ($220 for one filer and one child; it was $110). Only married couples use that column path (de_files_separately), so this does not change a single filer's tax
oh_exemption_credit_potential, oh_personal_exemptions_eligible_person	R.C. 5747.022, 5747.025	Follows; dependents of a return with a claimable filer are no longer eligible for the personal exemption
or_regular_exemptions	ORS 316.085: exemptions "allowed under section 151"; OR-17: "If someone else can claim your spouse as a dependent, you can't claim their exemption"	Follows (Oregon's other exemption rules are in the Oregon PR)
wi_base_exemption	Wis. Stat. 71.05(23); Form 1 instructions: "either you or your spouse (not both) can be claimed"	Follows; the $250 age-65 addition of a claimable filer is removed in #10044
ga_low_income_credit_potential, ga_ctc_potential	Georgia's own count (O.C.G.A. 48-7A-3 deems each joint spouse a dependent) and IRC 24(c) only	Kept as before by reading tax_unit_size and a new ga_ctc_eligible_child (the IRC 24(c) child test), which the contributed refundable-credit and SB 520 reforms now share; Georgia's own claimable-filer rule is in #10050

The Hawaii and Wisconsin dependent-exemption reforms and the Treasury dependent-exemption repeal reform, which recomputed the personal count from exemptions_count, now use the filers' own exemptions so they stay consistent. The contributed state dependent-exemption repeal reform (repeal_state_dependent_exemptions) is not fixed here: its overrides still give a claimable filer their own exemption. A separate branch (repeal-state-dep-exemptions-claimable-filer) is changing them; that work is pending and must read the "can be claimed" input.

Other readers that inherit the gated CTC child test are correct under their own law: North Carolina's child deduction and credit ("for whom the taxpayer is allowed the federal tax credit", G.S. 105-153.5), Utah's credit, Idaho's credit, New York's 2021-2024 Empire State child credit ("claimed as a dependent on your federal income tax return", IT-213), and Maine's fairness credits ("eligible to claim the federal child tax credit"). New York's 2025-2026 child credit uses its own child definition and is unchanged.

Not changed, deliberately: head of household and surviving-spouse status (Pub. 501 keeps both for a claimable filer in most routes; the remaining routes need their own change), the medical expense deduction (IRC 213(a) disregards 152(b)(1)), and the EITC (its childless gate is in #10024).

Known limits of the inputs

1. Custodial parent. IRC 21(e)(5) makes a child released to the noncustodial parent under 152(e) the custodial parent's qualifying individual whatever the dependency rules say. The model has no input for a 152(e) release, so the child of a claimable custodial parent is not kept.
2. Childcare expenses are a tax-unit total. The model does not record which child an expense is for. On a return with a filer who can be claimed outside the claimant filing exception, childcare expenses count only if a child under 18 is still a qualifying individual (one incapable of self-care), and then all of them count.

Readings for Max (queue via the US + core hub)

1. Education credits and student loan interest on a joint return with one claimed spouse. This PR bars the whole return, following the Form 1040 instructions ("you, or your spouse if filing jointly"). IRC 25A(g)(3) and 221(c) speak of the individual who is claimed, so a per-spouse reading would keep the other spouse's credit or deduction.
2. Recovery rebates on a joint return with one claimable spouse (2020-2021). This PR counts each spouse separately (an "eligible individual" is defined per person), giving $1,400 in 2021. The 2020-2021 worksheets skip the dependency question for joint returns ("If filing a joint return, go to line 2"), which would give the full $2,800; a joint-return bar would give $0. The flags are inconsistent with a joint rebate claim in any case, since claiming it defeats the refund-only exception that lets a married person be claimed.
3. Georgia. Whether Georgia's credits reach a filer who can be claimed is left unchanged here (see the table).
4. New Mexico low-income rebate, age-65 and blind extras of a claimable spouse. The rebate's exemption count still adds them (NMSA 7-2-14(C) adds them for "each individual ... included in the return"), giving three exemptions for a claimable 70-year-old with a spouse who cannot be claimed. The PIT-RC instructions leave the non-qualifying spouse out of the household members on line 2a; applying that exclusion to the age and blind lines too (which the instructions do not say) would give one.
5. Hawaii exemptions, one claimable spouse. The corrected count keeps the other spouse's $1,144 (HRS 235-54(a) is per individual). From 2023 the N-11 line 6a instruction tells a claimable filer to leave both ovals blank. The Oregon-Maine-Hawaii PR states this reading in full.

Invariants

These hold for every input:

1. Swap invariance. Exchanging the two adults' head/spouse labels leaves every changed tax-unit output, and every tax-unit total of a person-level amount, unchanged for any combination of claimed spouses. (Which spouse a person-level amount lands on can follow the label where the formula breaks a tie, as Delaware's allocation of dependent credits between two columns already did.)
2. Monotonicity. Marking another filer as claimed never raises ctc_maximum, ctc_qualifying_children, capped_count_cdcc_eligible, cdcc_relevant_expenses, exemptions_count, rrc_arpa or the state amounts that read the exemption count.
3. Count identity. exemptions_count = head_spouse_count_not_dependent_elsewhere + (dependents, unless a filer is claimable outside the filing exception).
4. No dependents. A return with a filer who is claimable outside the claimant filing exception has no CTC-qualifying child and no credit for other dependents.
5. Unchanged when no filer can be claimed (a filer who can be claimed but is not claimed does trigger the claimability rules), with two intended exceptions: de_personal_credit_indv for a return without a spouse (see the Delaware row), and the Hawaii renters credit, which no longer counts a dependent who can be claimed elsewhere (two filers and such a child get $100, not $150). Georgia is unchanged in every case. The microsimulation below checks this on the default dataset, where nobody can be claimed.

Tests

• YAML: variable-named cases for every changed formula. Each joint case with a claimable spouse appears under both head/spouse labellings, with single, both-claimed and nobody-claimed controls. Run locally at 35a2cbcbb9: the changed YAML files and the test folders next to every changed variable (234 files): 1,452 passed, 0 failed.
• Property test policyengine_us/tests/core/test_claimable_filer_federal_invariants.py (reusing Make rules for a filer claimed elsewhere independent of which spouse is labelled head #10024's household builders) in Texas, the seven states that read the federal count, and Georgia (which keeps its own count, as a control) for 2021-2026. Hypothesis batches check invariants 1, 3 and 4; a seeded population checks 1-4. Its outputs are the federal amounts above and the state amounts that read the exemption count. The population sets the "is claimed" input (so "can be claimed" follows it) and never the filing exception; the identities assume that. The generated adults have no tuition or student loan interest. So the filing exception, a filer who can be claimed but is not, the education credit, tuition deduction, student loan interest and the reforms are covered by YAML only. 7 tests passed, 0 failed, in 50 s with a peak memory footprint of 2.6 GB (/usr/bin/time -l).

Microsimulation impact

Real microsimulations on the default dataset (hf://datasets/policyengine/populace-us/populace_us_2024.h5@populace-us-2024-spm-20260909) for 2025 and 2026, compared record by record. In that dataset no person can be claimed as a dependent on another return (claimable_as_dependent_on_another_return is true for 0 of 166,321 people), so every rule gated on it is inactive there; the runs check that nothing else moves.

#10024's head (c7f969f872) against this branch (35a2cbcbb9), 81 variables (federal and state income tax, household net income, and every credit, deduction and count changed here):

• 2025: no record changes in any variable.
• 2026: no record changes in any variable.

Follow-ups (separate tasks)

Left for separate changes so this PR stays reviewable:

• The premium tax credit for a claimable filer and that filer's family size (IRC 36B(c)(1)(D), (d)(1)).
• Head-of-household routes and the IRC 6012 filing threshold for a claimable filer.
• The AMT exemption limit for a child subject to the kiddie tax (IRC 59(j)).
• New Mexico: the child income tax credit's child count and the medical expense exemption's limits (Count New Mexico child credit children under IRC 152(c); do not halve the 65+ medical exemption for separate filers #10047).
• Virginia's exclusion list, and the remaining states and DC from the 50-state audit (Apply New Jersey, North Dakota, Ohio, Oklahoma and Pennsylvania rules for a filer who can be claimed as a dependent #10043, Apply the RI, SC, UT, VT, WV and WI rules for a filer who can be claimed as a dependent #10044, Apply Iowa, Kansas, Louisiana and Maryland rules for a filer who can be claimed as a dependent #10045, Apply Colorado, Connecticut, Illinois and Indiana rules for a filer who can be claimed as a dependent #10049, Apply District of Columbia, Georgia and Idaho rules for a filer who can be claimed as a dependent #10050, Apply Arizona, Arkansas and California rules for a filer who can be claimed as a dependent #10053 and one more regional branch).
• The contributed state dependent-exemption repeal reform, which still recomputes personal exemptions from head_spouse_count.
• The tuition and fees deduction is still computed for 2021 on, after its repeal (it is not in the deduction totals).

Axiom parity

axiom: us/statutes/26/24 + us/statutes/26/24/h + us/statutes/26/152 queued (F1: TheAxiomFoundation/rulespec-us#1684) | us/statutes/26/21 queued (F1: TheAxiomFoundation/rulespec-us#1684) | us/statutes/26/151 queued (F1: TheAxiomFoundation/rulespec-us#1684) | IRC 6428, 6428A, 6428B n/a: historical 2020–2021 provisions, no Axiom module found, final corrections recorded in F1 limits outside rebate encoding scope | us/statutes/26/25A queued (F1: TheAxiomFoundation/rulespec-us#1684) | us/statutes/26/221 queued (F1: TheAxiomFoundation/rulespec-us#1684) | IRC 222(c)(3) queued (F1: TheAxiomFoundation/rulespec-us#1684) | us-ri/statutes/44-30-2.6 + us-ri/policies/income_tax/resident_core_liability_pipeline queued (RI1: TheAxiomFoundation/rulespec-us#1691) | us-de/statutes/30/1110 queued (DE1: TheAxiomFoundation/rulespec-us#1683) | us-oh/statutes/5747/025 + us-oh/statutes/5747/022 queued (OH1: TheAxiomFoundation/rulespec-us#1689) | us-wi/statutes/71/05/23 + us-wi/policies/income_tax/2026_full_year_resident_core queued (WI1: TheAxiomFoundation/rulespec-us#1693) | us-or/statutes/316/085 queued (OR1: TheAxiomFoundation/rulespec-us#1690) | us-hi/statutes/235-54 queued (HI1: TheAxiomFoundation/rulespec-us#1685) | us-hi/statutes/235-55/85 queued (HI1: TheAxiomFoundation/rulespec-us#1685) | Act 115 (SLH 2022), §3 queued (HI1: TheAxiomFoundation/rulespec-us#1685) | us-hi/statutes/235-55/7 queued (HI1: TheAxiomFoundation/rulespec-us#1685) | us-nm/statutes/7-2-14 + us-nm/statutes/7-2-5/8 queued (NM1: TheAxiomFoundation/rulespec-us#1687) | contributed exemption reforms n/a: PE-only reform implementation, added tests preserve the eligibility contract, no corresponding Axiom reform module found | us-ga/statutes/48/48-7A-3 n/a: this branch only decouples its state count from the federal count; substantive Georgia eligibility is outside this stack | O.C.G.A. 48-7-29.27(a), IRC 24(c) n/a: this branch preserves Georgia's child-definition boundary through predicate decoupling; no Georgia CTC module found and substantive filer eligibility remains outside this stack | Hawaii mixed-spouse disability amount not filed: official sources conflict, see TheAxiomFoundation/rulespec-us#1685 | general no-return-required exception not filed beyond the single-filer case: see TheAxiomFoundation/rulespec-us#1684

Every queued item is a pe-parity issue filed in TheAxiomFoundation/rulespec-us on 2026-10-12 (verbatim law, required outputs, review finding, companion tests).

🤖 Generated with Claude Code

[MaxGhenis]

Hand-off to the US + core hub

• Head: 35a2cbcbb9
• Independent review: APPROVE at 35a2cbcbb9 (GPT-6.1 Sol, round 5; rounds 1-4 and my responses are next to it). Verdict file: ~/reviews/us-hub/claimable-filer-rules/reviews/r5/out-federal.md.
• Passed locally: 234 YAML files: 1,452 passed, 0 failed; property test 7 passed. Also: a sweep of every YAML file in the repo that sets a dependent-elsewhere input (115 files) on a merge of all five branches, 0 failed; microsimulations for 2025 and 2026 (details in the PR body).
• Depends on: Make rules for a filer claimed elsewhere independent of which spouse is labelled head #10024.

Pending (not mine to do):

• Merge order: this stack lands after Make rules for a filer claimed elsewhere independent of which spouse is labelled head #10024 (approved at c7f969f872, on the hub's CI queue), then Apply the federal rules for a filer who can be claimed as a dependent #10087 (federal), then the four state PRs. CI does not run on PRs whose base is not main, so each needs a CI run after it is retargeted to main and marked ready.
• Readings for Max are listed in the PR body under "Readings for Max" for the hub to queue (none queued by me).
• Axiom parity: the axiom: line marks each provision needed (draft, held for Max); filing the eleven drafted rulespec-us issues is decision d1341 (drafts in ~/reviews/us-hub/claimable-filer-rules/axiom/drafts/).

Follow-ups: listed in #10087 under "Follow-ups"; the hub holds the regional state PRs stacked on the federal branch.

Session local_0143a3e8-4ab1-4492-8aab-9140b74e67e5 is closing; the hub owns this PR from here.