Apply New Mexico's rules for a filer who can be claimed as a dependent

[MaxGhenis]

Summary

New Mexico bars "a dependent of another individual" from several credits and exemptions, and counts as dependents only those allowed under IRC 152, which leaves a return with a claimable filer none (IRC 152(b)(1)). The model applied none of these, and two 65+ provisions counted a dependent's age as if it were a filer's. On a joint return, TRD's PIT-RC instructions say a spouse who is not a dependent "may still qualify to claim rebates or credits" (2025 PIT-RC p.2), so those credits stay for that spouse.

Which fact each rule reads (#10024 separates them): the "not a dependent of another individual" rules (child income tax credit, medical care credit, property tax rebate, centenarian exemption) read whether a filer can be claimed; the rules that need dependents (child care credit child, certain-dependents deduction) and the childless EITC read whether a filer can be claimed and the filing exception does not apply (Pub. 501, Pub. 596).

Stacked on the federal claimable-filer PR (which corrects exemptions_count and with it the low-income comprehensive tax rebate and the low- and middle-income exemption) and on #10024.

Formula	Rule now	Source
nm_ctc	Needs a filer who cannot be claimed; the child count is not changed here (it still reads eitc_child_count, which #10047 replaces with a 152(c) count)	NMSA 7-2-18.34(A): "a taxpayer who is a resident and is not a dependent of another individual"; (J)(2) imports 152(c), not 152(b)(1); PIT-RC p.10
nm_medical_expense_credit	A filer who is both 65 or older and not claimable; a dependent's age no longer counts	NMSA 7-2-18.13(A): "a taxpayer ... who is sixty-five years of age or older and who is not a dependent of another taxpayer"; PIT-RC line 23: "If you or your spouse are 65 years of age or older"
nm_medical_expense_exemption	A filer 65 or older; no dependency bar	NMSA 7-2-5.9(A): "Any individual sixty-five years of age or older"; PIT-ADJ line 18: "If you or your spouse are 65"
nm_eitc_demographic_eligible	Childless route needs no filer who can be claimed outside the filing exception (either spouse bars, as federally) and a filer of eligible age. The child route needs a qualifying child under IRC 32(c)(3) before the identification rule: a dependent under 19, a student under 24, or permanently and totally disabled. It counted any member under 18, a filer included, and missed qualifying children aged 18 or over	NMSA 7-2-18.15 imports federal eligibility apart from age and ID; IRC 32(c)(1)(A)(ii)(II)-(III), 32(c)(3); Pub. 596 Rule 12
nm_property_tax_rebate_eligible	A filer who is both 65 or older and not claimable	NMSA 7-2-18: "a dependent of another individual"
nm_hundred_year_exemption	Each spouse 100 or older qualifies only if not claimable	NMSA 7-2-5.7; PIT-ADJ: another person "cannot claim the centenarian as a dependent"
nm_cdcc_eligible_child	No eligible child when either filer can be claimed and the filing exception does not apply	NMSA 7-2-18.1 counts IRC 152 dependents; 152(b)(1)
nm_deduction_for_certain_dependents	No dependents to count when either filer can be claimed and the filing exception does not apply	NMSA 7-2-39 defines dependent by IRC 152; 152(b)(1)

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

1. Medical care credit, mixed ages. NMSA 7-2-18.13(A) puts the age and dependency tests on the same taxpayer, so a joint return whose only 65+ spouse can be claimed gets $0. The form-literal alternative (either spouse 65+, any spouse not claimable) gives $2,800. Make rules for a filer claimed elsewhere independent of which spouse is labelled head #10024 uses the same-filer reading only when a filer can be claimed; this PR also drops a dependent's age in every case.
2. Child income tax credit, mixed joint. A spouse who cannot be claimed keeps the credit and the 152(c) children (recommended); importing 152(b)(1) too would give $0.
3. Low-income rebate age and blind extras (in the federal PR): the claimable spouse's age-65 and blind exemptions still count under 7-2-14(C)'s "each individual ... included in the return"; dropping them is the alternative.

Not changed: the centenarian exemption still treats all of a couple's income as community income (half each), which predates this PR; an independent centenarian with $10,000 of separate income and a younger spouse gets $5,000 exempted, not $10,000. Also not changed: the medical expense exemption's threshold. The code and the PIT-ADJ instructions use "$28,000 or more"; NMSA 7-2-5.9(A) says expenses that "exceed" $28,000. #10047 documents that conflict.

Invariants

1. Swap invariance of every changed output under either head/spouse labelling.
2. Monotonicity. Marking another filer as claimed never raises any changed output.
3. Unchanged when no filer can be claimed (a filer who can be claimed but is not claimed does trigger these rules), except three intended changes: the 65+ tests and the EITC age test now look only at filers (so a dependent's age no longer qualifies a return), and the EITC child route needs a qualifying child under IRC 32(c)(3): it now counts one aged 18 or over (before, such a return usually qualified through the child's own age) and no longer counts a filer under 18 or a child who is not a qualifying child.

Tests

• YAML: variable-named cases for every changed formula. Each joint case with exactly one claimable spouse, and each control whose spouses differ, appears under both head/spouse labellings. Run locally at 81f0f97d1b: the changed YAML files and the test folders next to every changed variable (18 files): 164 passed, 0 failed.
• Property test policyengine_us/tests/core/test_claimable_filer_nm_invariants.py for 2023, 2025 and 2026. Hypothesis batches check invariant 1; a seeded New Mexico population and crafted centenarian couples check 1 and 2. 4 tests passed, 0 failed, in 35 s with a peak memory footprint of 1.8 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.

This stack's federal branch (35a2cbcbb9) against a local merge of the four state branches onto it (13d24ac157). Each state branch changes only its own state's variables, so the comparison is split by state.

• 2025:

Variable (weighted total)	Base	This change	Difference	Records changed (weighted)
household_net_income (New Mexico households)	n/a	n/a	-191,795	3 (3,212)
nm_eitc_demographic_eligible	825,945 tax units	806,211 tax units	-19,734 tax units	22 (19,734)
nm_eitc	$147,865,111	$147,673,317	-191,794	4 (3,212)

• 2026:

Variable (weighted total)	Base	This change	Difference	Records changed (weighted)
household_net_income (New Mexico households)	n/a	n/a	-199,836	3 (3,235)
nm_eitc_demographic_eligible	831,843 tax units	811,968 tax units	-19,875 tax units	22 (19,875)
nm_eitc	$149,969,937	$149,770,108	-199,828	4 (3,235)

What changes (22 records each year, all with federal EITC $0): 16 are one-person tax units of a filer aged 3 to 17. Before, tax_unit_children counted that filer as the return's own child, which opened the child route; four of them got a New Mexico EITC of $11 to $62. Now the child route needs a qualifying child, and they are below New Mexico's minimum childless age. The other six are returns whose filers are all 67 or older, where only an adult dependent met the age range; their New Mexico EITC was already $0. Household net income changes in the three households that hold the four tax units.

Axiom parity

axiom: us-nm/statutes/7-2-18/34 queued (NM1: TheAxiomFoundation/rulespec-us#1687) | us-nm/statutes/7-2-18/13 queued (NM1: TheAxiomFoundation/rulespec-us#1687) | us-nm/statutes/7-2-5/9 queued (NM1: TheAxiomFoundation/rulespec-us#1687) | us-nm/statutes/7-2-18/15 queued (NM1: TheAxiomFoundation/rulespec-us#1687) | us-nm/statutes/7-2-39 queued (NM1: TheAxiomFoundation/rulespec-us#1687) | us-nm/statutes/7-2-18 queued (NM1: TheAxiomFoundation/rulespec-us#1687) | us-nm/statutes/7-2-18/1 queued (NM1: TheAxiomFoundation/rulespec-us#1687) | us-nm/statutes/7-2-5/7 queued (NM1: TheAxiomFoundation/rulespec-us#1687)

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: 81f0f97d1b
• Independent review: APPROVE at 0ef979aed9 (GPT-6.1 Sol, round 4). The current head only merges the reviewed federal head 35a2cbcbb9 into it; this PR's own diff (git diff 35a2cbcbb9 81f0f97d1b) is byte-identical to the reviewed one. Verdict file: ~/reviews/us-hub/claimable-filer-rules/reviews/r4/out-nm.md.
• Passed locally: 18 YAML files: 164 passed, 0 failed; property test 4 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: Apply the federal rules for a filer who can be claimed as a dependent #10087 and Make rules for a filer claimed elsewhere independent of which spouse is labelled head #10024. Count New Mexico child credit children under IRC 152(c); do not halve the 65+ medical exemption for separate filers #10047 is stacked on this branch.

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.