Limit the Montana elderly homeowner/renter credit to one claimant per household (MCA 15-30-2341(1))

changelog.d/fix-mt-ehrc-household-member-income.fixed.md

@@ -0,0 +1 @@
+Apply the full Montana elderly homeowner/renter credit multiplier when permitted adjustments make household income negative.

changelog.d/fix-mt-ehrc-one-claimant-per-household.fixed.md

@@ -0,0 +1 @@
+Limit the Montana elderly homeowner/renter credit to one claimant per household (MCA 15-30-2341(1)): when several tax units in a household qualify, only the one with the largest credit is paid.

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

@@ -11,6 +11,10 @@
     tax_units:
       tax_unit:
         members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: MT
   output:
     mt_elderly_homeowner_or_renter_credit: 0
 
@@ -33,6 +37,10 @@
     tax_units:
       tax_unit:
         members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: MT
   output:  
   # min_((propertytax + rent*rate - (grossincome-standard)*reduction_rate), 1150) * percentage(grossincome)
   # 1500+ 9000*2*0.15 - (34000-12600)*0.05 = 3130 # 1150*100%
@@ -57,6 +65,10 @@
     tax_units:
       tax_unit:
         members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: MT
   output:  
   # min_((propertytax + rent*rate - (grossincome-standard)*reduction_rate), 1000) * percentage(grossincome)
   # 1500+ 9000*2*0.15 - (34000-6300)*0.05 = 2815 # 1000*100%
@@ -87,6 +99,10 @@
     tax_units:
       tax_unit:
         members: [person1, person2, person3]
+    households:
+      household:
+        members: [person1, person2, person3]
+        state_code: MT
   output:  
   # min_((propertytax + rent*rate - (grossincome-standard)*reduction_rate), 1150) * percentage(grossincome)
   # 1000+ 9000*0.15 - (43000-12600)*0.05 = 830 # 830*10% = 83
@@ -111,6 +127,10 @@
     tax_units:
       tax_unit:
         members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: MT
   output:
     # Each person's gross household income is under the $35,000 threshold
     # (multiplier 1.0 per-person), but the tax-unit sum is $44,000 which
@@ -130,6 +150,10 @@
     tax_units:
       tax_unit:
         members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: MT
   output:
     mt_elderly_homeowner_or_renter_credit: 0
 
@@ -408,6 +432,201 @@
     mt_elderly_homeowner_or_renter_credit_net_household_income: [870, 0]
     mt_elderly_homeowner_or_renter_credit: [1_130, 0]
 
+- name: 2024 Schedule 2EC, two eligible siblings filing separately in one household; only the larger claim is paid
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 66
+        taxable_pension_income: 10_000
+        rent: 4_800
+      person2:
+        age: 70
+        taxable_pension_income: 15_000
+        rent: 7_200
+    tax_units:
+      tax_unit1:
+        members: [person1]
+      tax_unit2:
+        members: [person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_name: MT
+  output:
+    # Both siblings are 62 or older and file their own returns. Line 18
+    # gross household income = 10_000 + 15_000 = 25_000 for each; line 20 =
+    # 25_000 - 12_600 = 12_400; line 21 = 0.05; line 22 = 620.
+    # person1: line 25 = 4_800 x 0.15 = 720; line 27 = 720 - 620 = 100.
+    # person2: line 25 = 7_200 x 0.15 = 1_080; line 27 = 1_080 - 620 = 460.
+    # Line 29 = 100% (under 35_000). "Only one claimant per household in a
+    # claim period ... is entitled to relief" (§ 15-30-2341(1)); the
+    # household claims through person2, whose credit is larger. Before the
+    # limit both were paid, 560 in total.
+    mt_elderly_homeowner_or_renter_credit_pre_one_claimant: [100, 460]
+    mt_elderly_homeowner_or_renter_credit_selected_claimant: [false, true]
+    mt_elderly_homeowner_or_renter_credit: [0, 460]
+    mt_refundable_credits: [0, 460]
+    taxsim_state_property_tax_credit: [0, 460]
+    # 2024 Form 2, PDF p. 1: federal standard deduction 16,550 plus
+    # old-age subtraction 5,500 exceeds either pension. Tax before
+    # refundable credits is zero, so only person2 receives a refund.
+    mt_income_tax: [0, -460]
+
+- name: 2024 Schedule 2EC, one eligible tax unit and one younger household member who files separately
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 70
+        taxable_pension_income: 10_000
+        rent: 4_800
+      person2:
+        age: 58
+        taxable_pension_income: 15_000
+        rent: 7_200
+    tax_units:
+      tax_unit1:
+        members: [person1]
+      tax_unit2:
+        members: [person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_name: MT
+  output:
+    # Same household as above, but person2 is under 62 and cannot be a
+    # claimant (§ 15-30-2338(1)(a)), even though their rent is larger.
+    # Line 22 = 620; person1's line 27 = 720 - 620 = 100.
+    mt_elderly_homeowner_or_renter_credit_selected_claimant: [true, false]
+    mt_elderly_homeowner_or_renter_credit: [100, 0]
+
+- name: 2025 Schedule 2EC, a joint couple who both qualify make one claim
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 70
+        taxable_pension_income: 15_000
+        real_estate_taxes: 2_000
+      person2:
+        age: 66
+        taxable_pension_income: 10_000
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_name: MT
+  output:
+    # "If filing jointly and both spouses qualify for the credit, enter the
+    # spouse listed as the taxpayer on page 1 as the claimant" (2025
+    # instructions). Line 18 = 25_000; line 22 = 12_400 x 0.05 = 620;
+    # line 27 = 2_000 - 620 = 1_380; line 28 = 1_150 cap; line 30 = 1_150,
+    # held by the tax unit head.
+    mt_elderly_homeowner_or_renter_credit_selected_claimant: true
+    mt_elderly_homeowner_or_renter_credit: [1_150, 0]
+
+- name: 2024 Schedule 2EC, two eligible tax units with equal credits; exactly one claims
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 68
+        taxable_pension_income: 12_500
+        rent: 6_000
+      person2:
+        age: 72
+        taxable_pension_income: 12_500
+        rent: 6_000
+    tax_units:
+      tax_unit1:
+        members: [person1]
+      tax_unit2:
+        members: [person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_name: MT
+  output:
+    # Line 18 = 25_000; line 22 = 620; each line 27 = 900 - 620 = 280. The
+    # household gets one 280 credit; the tie goes to the first tax unit in
+    # the household's member order.
+    mt_elderly_homeowner_or_renter_credit_pre_one_claimant: [280, 280]
+    mt_elderly_homeowner_or_renter_credit_selected_claimant: [true, false]
+    mt_elderly_homeowner_or_renter_credit: [280, 0]
+
+- name: 2024 Schedule 2EC, the one-claimant limit applies within each household, not across households
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 70
+        taxable_pension_income: 20_000
+        real_estate_taxes: 2_000
+      person2:
+        age: 75
+        taxable_pension_income: 10_000
+        rent: 6_000
+    tax_units:
+      tax_unit1:
+        members: [person1]
+      tax_unit2:
+        members: [person2]
+    households:
+      household1:
+        members: [person1]
+        state_name: MT
+      household2:
+        members: [person2]
+        state_name: MT
+  output:
+    # Household 1: line 18 = 20_000; line 20 = 7_400; line 21 = 0.035;
+    # line 22 = 259; line 27 = 2_000 - 259 = 1_741; line 28 = 1_150.
+    # Household 2: line 18 = 10_000; line 20 = 0; line 22 = 0;
+    # line 27 = 6_000 x 0.15 = 900. Each household has its own claimant.
+    mt_elderly_homeowner_or_renter_credit_selected_claimant: [true, true]
+    mt_elderly_homeowner_or_renter_credit: [1_150, 900]
+
+- name: 2023 dependent self-employment income preserves the deductible half of SE tax
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    people:
+      claimant:
+        age: 70
+        is_tax_unit_dependent: false
+        taxable_pension_income: 20_000
+        rent: 12_000
+      child:
+        age: 18
+        is_tax_unit_dependent: true
+        self_employment_income: 10_000
+    tax_units:
+      claimant_unit:
+        members: [claimant, child]
+    households:
+      household:
+        members: [claimant, child]
+        state_code: MT
+  output:
+    # 2023 Schedule SE, PDF p. 1, lines 4a and 10-13:
+    # https://www.irs.gov/pub/irs-prior/f1040sse--2023.pdf#page=1
+    # 10,000 * .9235 * (.124 + .029) / 2 = 706.4775 deductible SE tax.
+    # 2023 MT instructions, PDF pp. 51-52, lines 1 and 9: use each
+    # member's federal AGI and add back losses, preserving other adjustments.
+    # 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=51
+    # Income = 20,000 + 10,000 - 706.4775 = 29,293.5225.
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: [20_000, 9_293.5225]
+    # Credit = 12,000 * .15 - (29,293.5225 - 12,600) * .05 = 965.323875.
+    mt_elderly_homeowner_or_renter_credit: [965.323875, 0]
+
 - name: 2024 Schedule 2EC worked case, a household member's federal EITC counts as a refundable credit received
   period: 2024
   absolute_error_margin: 0.01
@@ -580,3 +799,46 @@
     # = 1_099.89; line 21 = 100%; line 22 = 1_099.89.
     mt_elderly_homeowner_or_renter_credit_net_household_income: [900.11, 0]
     mt_elderly_homeowner_or_renter_credit: [1_099.89, 0]
+
+- name: Federal refundable credits and actual receipts reduce both elderly claims before selecting the larger one
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 66
+        taxable_pension_income: 10_000
+        rent: 4_800
+        mt_elderly_homeowner_or_renter_credit_received: 60
+        mt_elderly_homeowner_or_renter_credit_property_tax_rebate_received: 20
+      person2:
+        age: 70
+        taxable_pension_income: 15_000
+        rent: 7_200
+        mt_elderly_homeowner_or_renter_credit_received: 40
+        mt_elderly_homeowner_or_renter_credit_property_tax_rebate_received: 80
+    tax_units:
+      tax_unit1:
+        members: [person1]
+        income_tax_refundable_credits: 500
+      tax_unit2:
+        members: [person2]
+        income_tax_refundable_credits: 300
+    households:
+      household:
+        members: [person1, person2]
+        state_code: MT
+  output:
+    # Schedule 2EC line 8 counts each return's federal refundable credits
+    # once, plus actual elderly-credit and rebate receipts. Person amounts:
+    # 10_000 + 500 + 60 + 20 = 10_580; 15_000 + 300 + 40 + 80 = 15_420.
+    # Line 18 = 26_000; line 22 = (26_000 - 12_600) * .05 = 670.
+    # Line 25 rent equivalents = [4_800, 7_200] * .15 = [720, 1_080].
+    # Line 27 = [720, 1_080] - 670 = [50, 410], both below the 1_150 cap.
+    # Line 29 = 100% below 35_000. Only the larger 410 claim is paid;
+    # without the 1_000 of federal credits/receipts, it would be 460.
+    mt_elderly_homeowner_or_renter_credit_gross_household_income: [10_580, 15_420]
+    mt_elderly_homeowner_or_renter_credit_net_household_income: [670, 670]
+    mt_elderly_homeowner_or_renter_credit_pre_one_claimant: [50, 410]
+    mt_elderly_homeowner_or_renter_credit_selected_claimant: [false, true]
+    mt_elderly_homeowner_or_renter_credit: [0, 410]

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

@@ -0,0 +1,37 @@
+- name: Case 1, each eligible tax unit's credit before the one-claimant limit.
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 66
+        taxable_pension_income: 10_000
+        rent: 4_800
+      person2:
+        age: 70
+        taxable_pension_income: 15_000
+        rent: 7_200
+      person3:
+        age: 40
+        taxable_interest_income: 5_000
+        rent: 3_000
+    tax_units:
+      tax_unit1:
+        members: [person1]
+      tax_unit2:
+        members: [person2]
+      tax_unit3:
+        members: [person3]
+    households:
+      household:
+        members: [person1, person2, person3]
+        state_name: MT
+  output:
+    # 2024 Schedule 2EC. Line 18 = 10_000 + 15_000 + 5_000 = 30_000 for the
+    # whole household; line 20 = 17_400; line 21 = 0.05; line 22 = 870.
+    # person1: line 25 = 720; line 27 = max(720 - 870, 0) = 0.
+    # person2: line 25 = 1_080; line 27 = 1_080 - 870 = 210.
+    # person3 is under 62, so not a claimant (§ 15-30-2338(1)(a)).
+    mt_elderly_homeowner_or_renter_credit_pre_one_claimant: [0, 210, 0]
+    mt_elderly_homeowner_or_renter_credit_selected_claimant: [false, true, false]
+    mt_elderly_homeowner_or_renter_credit: [0, 210, 0]