Count a Montana casualty loss once per joint return and only for the spouse who had it

changelog.d/fix-mt-casualty-loss-misc-deduction.fixed.md

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+Count a Montana casualty and theft loss once on a joint return, and only in the column of the spouse who had it when spouses file separately, figured as on federal Form 4684 ($100 reduction, then the 10% floor on Montana AGI) per the 2021-2023 Form 2 Itemized Deductions Schedule, line 15.

changelog.d/fix-mt-separate-filing-allocations.fixed.md

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+Montana's federal income tax deduction for spouses filing separately on the same form now attributes federal tax to the spouse who earned the income and caps each spouse at 5,000; the child and dependent care expense deduction phases out on the couple's combined Montana AGI and is halved only for spouses filing separately on the same form; and the elderly homeowner/renter credit counts income without regard to losses.

policyengine_us/parameters/gov/irs/deductions/itemized/casualty/per_casualty_reduction.yaml

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+description: The IRS reduces each casualty or theft loss of personal-use property by this amount before applying the income floor.
+values:
+  2008-01-01: 100
+  2009-01-01: 500
+  2010-01-01: 100
+metadata:
+  unit: currency-USD
+  period: year
+  label: Casualty loss reduction per casualty
+  reference:
+    - title: 26 U.S.C. § 165(h)(1)
+      href: https://www.law.cornell.edu/uscode/text/26/165#h_1
+    - title: 2008 Form 4684, line 11
+      href: https://www.irs.gov/pub/irs-prior/f4684--2008.pdf#page=1
+    - title: 2009 Form 4684, line 11
+      href: https://www.irs.gov/pub/irs-prior/f4684--2009.pdf#page=1
+    - title: 2022 Form 4684, line 11
+      href: https://www.irs.gov/pub/irs-prior/f4684--2022.pdf#page=1
+    - title: IRS Publication 547 (2022), $100 Rule
+      href: https://www.irs.gov/pub/irs-prior/p547--2022.pdf#page=10

policyengine_us/parameters/gov/states/mt/tax/income/deductions/itemized/casualty_loss/applies.yaml

@@ -0,0 +1,22 @@
+description: Montana allows a casualty and theft loss deduction on its Itemized Deductions Schedule, if this is true.
+metadata:
+  label: Montana casualty and theft loss deduction applies
+  period: year
+  unit: bool
+  reference:
+    - title: MCA § 15-30-2131(1)(a) (2021), itemized deductions by reference to 26 U.S.C. 161 and 211 (repealed effective 2024)
+      href: https://mca.legmt.gov/bills/2022/mca/title_0150/chapter_0300/part_0210/section_0310/0150-0300-0210-0310.html
+    - title: 2021 Montana Form 2 Instructions, Itemized Deductions Schedule, line 15
+      href: https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2021_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=34
+    - title: 2022 Montana Form 2 Instructions, Itemized Deductions Schedule, line 15
+      href: https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2022_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=35
+    - title: 2023 Montana Form 2 Instructions, Itemized Deductions Schedule, line 15
+      href: https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2023_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=39
+    # From 2024, Montana taxable income starts from federal taxable income and
+    # the Itemized Deductions Schedule is discontinued (SB 399).
+    - title: 2024 Montana Form 2 Instructions, Discontinued Worksheets and Schedules
+      href: https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2024_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=8
+
+values:
+  2021-01-01: true
+  2024-01-01: false

policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/credits/elderly_homeowner_or_renter/mt_elderly_homeowner_or_renter_credit.yaml

@@ -223,3 +223,34 @@
     # Same household, larger exclusion ($12,600) leaves a smaller expected
     # contribution, so the credit is higher: $539.67.
     mt_elderly_homeowner_or_renter_credit: 539.67
+
+- name: 2023 Elderly Homeowner/Renter Credit Schedule worked case, a capital loss does not reduce gross household income
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 70
+        taxable_pension_income: 20_000
+        long_term_capital_gains: -3_000
+        social_security_retirement: 10_000
+        real_estate_taxes: 2_000
+        mt_refundable_credits_before_renter_credit: 0
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    # Line 1 federal AGI 17_000 (Social Security untaxed: 17_000 + 5_000 is
+    # under the 25_000 base); line 5 untaxed Social Security 10_000; line 9
+    # losses 3_000; line 10 gross household income 30_000.
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: 30_000
+    # Line 12 = 30_000 - 12_600 = 17_400; line 13 multiplier 0.05;
+    # line 14 = 870.
+    mt_elderly_homeowner_or_renter_credit_net_household_income: 870
+    # Line 18 = 2_000; line 19 = 1_130; line 20 = min(1_130, 1_150);
+    # line 21 = 100% (under 35_000); line 22 = 1_130.
+    mt_elderly_homeowner_or_renter_credit: 1_130

policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/credits/elderly_homeowner_or_renter/mt_elderly_homeowner_or_renter_credit_gross_household_income.yaml

@@ -37,3 +37,51 @@
     # § 15-30-2337(9)(a)(viii) requires all SS to be counted, even the
     # portion excluded from federal AGI.
     mt_elderly_homeowner_or_renter_credit_gross_household_income: 30_000
+
+- name: A capital loss deducted in federal AGI is added back
+  period: 2023
+  input:
+    people:
+      person1:
+        age: 70
+        taxable_pension_income: 20_000
+        long_term_capital_gains: -3_000
+        mt_refundable_credits_before_renter_credit: 0
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_name: MT
+  output:
+    # § 15-30-2337(9)(a): federal AGI "without regard to loss". 2023 Elderly
+    # Homeowner/Renter Credit Schedule:
+    # line 1 federal AGI 20_000 - 3_000 = 17_000; line 9 adds back the 3_000
+    # capital loss; line 10 = 20_000.
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: 20_000
+
+- name: A business loss deducted in federal AGI is added back once for the return
+  period: 2024
+  input:
+    people:
+      person1:
+        age: 70
+        taxable_pension_income: 20_000
+        mt_refundable_credits_before_renter_credit: 0
+      person2:
+        age: 68
+        self_employment_income: -5_000
+        mt_refundable_credits_before_renter_credit: 0
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_name: MT
+  output:
+    # Federal AGI 20_000 - 5_000 = 15_000; the 5_000 loss is added back, so
+    # gross household income is 20_000 (2024 Schedule 2EC line 18). Net household
+    # income: (20_000 - 12_600) * 0.035 = 259, allocated to the head.
+    mt_elderly_homeowner_or_renter_credit_net_household_income: [259, 0]