Keep claimable-filer rules in the repeal of state dependent exemptions

changelog.d/repeal-state-dep-exemptions-claimable-filer.fixed.md

@@ -0,0 +1 @@
+Keep each state's rule for a filer who can be claimed as a dependent on another return in the repeal of state dependent exemptions: Delaware, Hawaii, Nebraska, Rhode Island, Virginia, West Virginia and Wisconsin no longer give such a filer a personal exemption, Vermont's count no longer depends on which spouse is labelled head, and Michigan no longer keeps that return's dependent exemptions when the would-be claimant meets the filing exception.

policyengine_us/reforms/state_dependent_exemptions/README.md

@@ -2,38 +2,40 @@ The following adjustments have been made in this reform:
 Alabama: Neutralize dependent exemptions
 California: Remove the dependent exemption structure from `ca_exemptions`
 Georgia: Remove the dependent exemption structure from `ga_exemptions`
-Hawaii: Change the `exemptions_count` to `head_spouse_count`
+Hawaii: Change the `exemptions_count` to `head_spouse_count_not_dependent_elsewhere`
 Illinois: Neutralize dependent exemptions
 Indiana: Change the `tax_unit_size` to `head_spouse_count`
 Iowa: Remove the dependent exemption structure from `ia_exemption_credit`
 Kansas: Remove the dependents from the exemption count
 Louisiana: Neutralize dependent exemptions
 Maryland: Change the `tax_unit_size` to `head_spouse_count`
 Massachusetts: Remove the dependent exemption structure from `ma_income_tax_exemption_threshold`
-Michigan: Change the `tax_unit_size` to `head_spouse_count`
+Michigan: Change the `tax_unit_size` to `head_spouse_count`, and remove the dependents from `mi_exemptions` on a return with a filer who can be claimed as a dependent
 Minnesota: Neutralize dependent exemptions
 Mississippi: Neutralize dependent exemptions
 Montana: Neutralize the dependent exemptions person
-Nebraska: Change the `tax_unit_size` to `head_spouse_count`
+Nebraska: Change the `exemptions_count` to `head_spouse_count_not_dependent_elsewhere`
 New Jersey: Neutralize dependent exemptions
 New Mexico: Neutralize the deduction for certain dependents
 New York: Neutralize dependent exemptions
 North Carolina: Neutralize the child deduction
 Ohio: Remove `is_tax_unit_dependent` from the exemption eligibility criteria
 Oklahoma: Remove the dependents from the total exemptions
-Rhode Island: Change the `exemptions_count` to `head_spouse_count`
+Rhode Island: Change the `exemptions_count` to `head_spouse_count_not_dependent_elsewhere`
 South Carolina: Neutralize dependent exemptions
 Utah: Neutralize the personal exemption amount
-Vermont: Remove the dependents from the personal exemptions
-Virginia: Only apply the personal exemptions to the head and spouse
-West Virginia: Change the `tax_unit_size` to `head_spouse_count`
-Wisconsin: Change the `tax_unit_size` to `head_spouse_count`
+Vermont: Remove the dependents from the personal exemptions, counting `head_spouse_count_not_dependent_elsewhere`
+Virginia: Only apply the personal exemptions to a head or spouse who cannot be claimed as a dependent
+West Virginia: Change the `exemptions_count` to `head_spouse_count_not_dependent_elsewhere`
+Wisconsin: Change the `exemptions_count` to `head_spouse_count_not_dependent_elsewhere`
 Arizona: Neutralize dependent exemptions
 Arkansas: Neutralize dependent exemptions
-Delaware: Change the `tax_unit_size` to `head_spouse_count`
+Delaware: Change the `exemptions_count` to `head_spouse_count_not_dependent_elsewhere`
 Idaho: Neutralize dependent exemptions CTC
 Iowa: Change the `tax_unit_size` to `head_spouse_count`
 Kentucky: Change the `tax_unit_size` in family_size to `head_spouse_count`
 Maine: Neutralize dependent exemptions
-Nebraska: Change the `tax_unit_size` to `head_spouse_count`
+Nebraska: Change the `exemptions_count` to `head_spouse_count_not_dependent_elsewhere`
 Oklahoma: Remove CTC portion and update return
+
+Where a state's baseline gives no personal exemption (in Oklahoma, no regular exemption) to a filer who can be claimed as a dependent on another return, the reform keeps that rule: California, Delaware, Hawaii, Kansas before 2024, Maryland, Michigan, Nebraska, Ohio, Oklahoma, Rhode Island, Vermont, Virginia, West Virginia and Wisconsin. Where the baseline lets such a filer keep it, so does the reform: Georgia, Indiana, Iowa, Kansas from 2024, Kentucky's family size and Massachusetts.

policyengine_us/reforms/state_dependent_exemptions/repeal_state_dependent_exemptions.py

@@ -13,13 +13,19 @@ class hi_regular_exemptions(Variable):
         defined_for = StateCode.HI
 
         def formula(tax_unit, period, parameters):
-            exemptions_count = tax_unit("head_spouse_count", period)
+            # The filers' own exemptions: none for a filer who can be claimed
+            # as a dependent, as in the baseline (HRS 235-54(a)).
+            exemptions_count = tax_unit(
+                "head_spouse_count_not_dependent_elsewhere", period
+            )
             p = parameters(period).gov.states.hi.tax.income.exemptions
-            # Aged heads and spouses get an extra base exemption.
+            # Aged heads and spouses who cannot be claimed get an extra base
+            # exemption.
             person = tax_unit.members
             head_or_spouse = person("is_tax_unit_head_or_spouse", period)
+            claimable = person("claimable_as_dependent_on_another_return", period)
             aged = person("age", period) >= p.aged_threshold
-            aged_head_spouse_count = tax_unit.sum(aged & head_or_spouse)
+            aged_head_spouse_count = tax_unit.sum(aged & head_or_spouse & ~claimable)
             total_exemption_count_including_aged = (
                 exemptions_count + aged_head_spouse_count
             )
@@ -62,6 +68,62 @@ def formula(tax_unit, period, parameters):
             )
             return exemptions * p.personal
 
+    class mi_exemptions(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "Michigan exemptions"
+        defined_for = StateCode.MI
+        unit = USD
+        definition_period = YEAR
+        reference = (
+            "https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-206-30",
+            "https://www.legislature.mi.gov/Publications/TaxpayerGuide.pdf",
+        )
+
+        def formula(tax_unit, period, parameters):
+            p = parameters(period).gov.states.mi.tax.income.exemptions
+
+            # Personal Exemptions & Stillborn Exemptions
+            personal_exemption = tax_unit("mi_personal_exemptions", period)
+
+            # Disabled exemptions
+            disabled_people = add(
+                tax_unit, period, ["mi_disabled_exemption_eligible_person"]
+            )
+            disabled_exemption = disabled_people * p.disabled.amount.base
+
+            # Disabled veteran exemptions
+            disabled_veterans = add(
+                tax_unit, period, ["is_fully_disabled_service_connected_veteran"]
+            )
+            disabled_veteran_exemption = disabled_veterans * p.disabled.amount.veteran
+
+            # MCL 206.30(4), as in the baseline: a filer who can be claimed as
+            # a dependent gets no personal exemption but subtracts $1,500, and
+            # the other spouse keeps their own. The baseline also allows that
+            # return's dependents when the would-be claimant meets the filing
+            # exception; the reform repeals those too.
+            filers = add(tax_unit, period, ["is_tax_unit_head_or_spouse"])
+            independent_filers = tax_unit(
+                "head_spouse_count_not_dependent_elsewhere", period
+            )
+            dependent_filers = filers - independent_filers
+            stillborn = tax_unit("tax_unit_stillborn_children", period)
+            independent_filer_exemptions = (
+                independent_filers + where(independent_filers > 0, stillborn, 0)
+            ) * p.personal
+            dependent_filer_exemptions = dependent_filers * p.dependent_on_other_return
+
+            return (
+                where(
+                    dependent_filers > 0,
+                    independent_filer_exemptions + dependent_filer_exemptions,
+                    personal_exemption,
+                )
+                + disabled_exemption
+                + disabled_veteran_exemption
+            )
+
     class ne_exemptions(Variable):
         value_type = float
         entity = TaxUnit
@@ -76,7 +138,13 @@ class ne_exemptions(Variable):
 
         def formula(tax_unit, period, parameters):
             p = parameters(period).gov.states.ne.tax.income.exemptions
-            return tax_unit("head_spouse_count", period) * p.amount
+            # The filers' own credits: none for a filer who can be claimed as
+            # a dependent (Neb. Rev. Stat. 77-2716.01), as in the baseline's
+            # federal count.
+            own_exemptions = tax_unit(
+                "head_spouse_count_not_dependent_elsewhere", period
+            )
+            return own_exemptions * p.amount
 
     class oh_personal_exemptions_eligible_person(Variable):
         value_type = bool
@@ -152,7 +220,11 @@ class ri_exemptions(Variable):
         def formula(tax_unit, period, parameters):
             p = parameters(period).gov.states.ri.tax.income.exemption
 
-            exemptions_count = tax_unit("head_spouse_count", period)
+            # The filers' own exemptions: none for a filer who can be claimed
+            # as a dependent, as in the baseline's federal count.
+            exemptions_count = tax_unit(
+                "head_spouse_count_not_dependent_elsewhere", period
+            )
 
             exemption_amount = exemptions_count * p.amount
 
@@ -178,15 +250,12 @@ class vt_personal_exemptions(Variable):
 
         def formula(tax_unit, period, parameters):
             p = parameters(period).gov.states.vt.tax.income.exemption
-            is_joint = tax_unit("tax_unit_is_joint", period)
-            elsewhere_head = tax_unit("head_is_dependent_elsewhere", period)
-            elsewhere_spouse = tax_unit("spouse_is_dependent_elsewhere", period)
-            eligible_head = (~elsewhere_head).astype(int)
-            eligible_spouse = (~elsewhere_spouse).astype(int)
-            eligible_count = eligible_head + (eligible_spouse * is_joint)
-            # add number of other dependents claimed on federal Form 1040 (line 5c)
-            total_exemption_count = eligible_count
-            return total_exemption_count * p.personal
+            # The filers' own exemptions: one for each head or spouse who
+            # cannot be claimed as a dependent, whichever spouse is head.
+            eligible_count = tax_unit(
+                "head_spouse_count_not_dependent_elsewhere", period
+            )
+            return eligible_count * p.personal
 
     class va_personal_exemption_person(Variable):
         value_type = float
@@ -200,9 +269,12 @@ class va_personal_exemption_person(Variable):
         )
 
         def formula(person, period, parameters):
+            # The filers' own exemptions: none for a filer who can be claimed
+            # as a dependent, as in the baseline (IRC 151(d)(2)).
             head_or_spouse = person("is_tax_unit_head_or_spouse", period)
+            claimable = person("claimable_as_dependent_on_another_return", period)
             amount = parameters(period).gov.states.va.tax.income.exemptions.personal
-            return amount * head_or_spouse
+            return amount * (head_or_spouse & ~claimable)
 
     class wv_personal_exemption(Variable):
         value_type = float
@@ -211,13 +283,20 @@ class wv_personal_exemption(Variable):
         defined_for = StateCode.WV
         unit = USD
         definition_period = YEAR
-        reference = "https://code.wvlegislature.gov/11-21/"
+        reference = "https://code.wvlegislature.gov/11-21-16/"
 
         def formula(tax_unit, period, parameters):
             p = parameters(period).gov.states.wv.tax.income.exemptions
-            tax_unit_size = tax_unit("head_spouse_count", period)
+            # The filers' own exemptions: none for a filer who can be claimed
+            # as a dependent, and $500 once per return when no filer has one
+            # (11-21-16(d)), as in the baseline.
+            own_exemptions = tax_unit(
+                "head_spouse_count_not_dependent_elsewhere", period
+            )
             return where(
-                tax_unit_size == 0, p.base_personal, p.personal * tax_unit_size
+                own_exemptions == 0,
+                p.base_personal,
+                p.personal * own_exemptions,
             )
 
     class ca_exemptions(Variable):
@@ -373,7 +452,7 @@ def formula(tax_unit, period, parameters):
             )
             return exempt_status.base[filing_status] + personal_exemptions_added
 
-    # Using head and spouse count instead of exemptions count
+    # Counting the filers' own exemptions instead of all exemptions
     class wi_base_exemption(Variable):
         value_type = float
         entity = TaxUnit
@@ -390,9 +469,13 @@ class wi_base_exemption(Variable):
         defined_for = StateCode.WI
 
         def formula(tax_unit, period, parameters):
-            # compute base exemption amount
+            # compute base exemption amount: none for a filer who can be
+            # claimed as a dependent, as in the baseline's federal count
             p = parameters(period).gov.states.wi.tax.income
-            return tax_unit("head_spouse_count", period) * p.exemption.base
+            own_exemptions = tax_unit(
+                "head_spouse_count_not_dependent_elsewhere", period
+            )
+            return own_exemptions * p.exemption.base
 
     class de_personal_credit(Variable):
         value_type = float
@@ -405,8 +488,12 @@ class de_personal_credit(Variable):
 
         def formula(tax_unit, period, parameters):
             p = parameters(period).gov.states.de.tax.income.credits
-            head_spouse_count = tax_unit("head_spouse_count", period)
-            return p.personal_credits.personal * head_spouse_count
+            # The filers' own credits: none for a filer who can be claimed as
+            # a dependent, as in the baseline's federal count.
+            own_exemptions = tax_unit(
+                "head_spouse_count_not_dependent_elsewhere", period
+            )
+            return p.personal_credits.personal * own_exemptions
 
     class ky_family_size_tax_credit_threshold(Variable):
         value_type = float
@@ -480,6 +567,7 @@ def apply(self):
             self.update_variable(hi_regular_exemptions)
             self.update_variable(md_total_personal_exemptions)
             self.update_variable(mi_personal_exemptions)
+            self.update_variable(mi_exemptions)
             self.update_variable(ne_exemptions)
             self.update_variable(oh_personal_exemptions_eligible_person)
             self.update_variable(ok_count_exemptions)