Count 18-year-olds as Minnesota qualifying older children

changelog.d/mn-cwfc-older-child-age.fixed.md

@@ -0,0 +1 @@
+Count 18-year-old qualifying children, students or not, as qualifying older children for the Minnesota working family credit.

policyengine_us/parameters/gov/states/mn/tax/income/credits/cwfc/wfc/additional/age_threshold.yaml

@@ -1,4 +1,4 @@
-description: Minnesota provides an additional working family credit amount for each qualifying child over this age threshold.
+description: Minnesota provides an additional working family credit amount for each qualifying child who has attained at least this age.
 values:
   2023-01-01: 18
 metadata:
@@ -7,10 +7,14 @@ metadata:
       href: https://www.revenue.state.mn.us/sites/default/files/2025-01/m1cwfc-24.pdf#page=2
     - title: 2023 Schedule M1CWFC, Minnesota Child and Working Family Credits
       href: https://www.revenue.state.mn.us/sites/default/files/2025-01/m1cwfc-23.pdf#page=2
+    - title: 2023 Schedule M1DQC, Dependents and Qualifying Children
+      href: https://www.revenue.state.mn.us/sites/default/files/2024-01/m1dqc-23.pdf#page=3
+    - title: 2024 Schedule M1DQC, Dependents and Qualifying Children
+      href: https://www.revenue.state.mn.us/sites/default/files/2024-12/m1dqc-24.pdf#page=3
     - title: 2025 Schedule M1DQC, Dependents and Qualifying Children
       href: https://www.revenue.state.mn.us/sites/default/files/2026-01/m1dqc-25.pdf#page=3
-    - title: 290.0671 MINNESOTA WORKING FAMILY CREDIT. Subd. 1 (3)
-      href: https://www.revisor.mn.gov/statutes/cite/290.0671
+    - title: 290.0671 MINNESOTA WORKING FAMILY CREDIT. Subd. 1a
+      href: https://www.revisor.mn.gov/statutes/cite/290.0671#stat.290.0671.1a
   unit: year
   period: year
-  label: Minnesota working family credit additional amount age threshold
+  label: Minnesota working family credit qualifying older child minimum age

policyengine_us/tests/policy/baseline/gov/states/mn/tax/income/credits/mn_child_and_working_families_credits.yaml

@@ -490,6 +490,157 @@
     # WFC base only: min($10,000, $9,480) * 0.04 = $379.20, no older-child bonus.
     mn_child_and_working_families_credits: 379.2
 
+# Minn. Stat. 290.0671, subd. 1a: a qualifying older child is an IRC 32(c)
+# qualifying child that "attained at least the age of 18". Schedule M1DQC
+# (2023-2025, page 3) step 4 sends a child who is not under 18 at the end of
+# the year to steps 5-8; step 7 checks row 11 for a full-time student and
+# step 8 checks row 11 for a child under 19, so every 18-year-old qualifying
+# child is a qualifying older child. The next four cases share one 2025
+# household: a head of household with $10,000 of wages and one dependent.
+- name: 2025 an 18-year-old full-time student is a qualifying older child
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      parent:
+        age: 40
+        employment_income: 10_000
+      child:
+        age: 18
+        is_tax_unit_dependent: true
+        is_full_time_student: true
+    tax_units:
+      tax_unit:
+        members: [parent, child]
+    households:
+      household:
+        members: [parent, child]
+        state_code: MN
+  output:
+    # WFC base: 4% of the first $9,480 of earned income = $379.20.
+    # One qualifying older child (M1DQC step 7): + $1,000.
+    # No CTC (not under 18); AGI $10,000 is below the $31,950 threshold.
+    mn_child_and_working_families_credits: 379.2 + 1_000
+
+- name: 2025 an 18-year-old who is not a student is a qualifying older child
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      parent:
+        age: 40
+        employment_income: 10_000
+      child:
+        age: 18
+        is_tax_unit_dependent: true
+        is_full_time_student: false
+    tax_units:
+      tax_unit:
+        members: [parent, child]
+    households:
+      household:
+        members: [parent, child]
+        state_code: MN
+  output:
+    # Under 19 at the end of the year (M1DQC step 8, IRC 152(c)(3)(A)), so
+    # the same $379.20 + $1,000 as the full-time student above.
+    mn_child_and_working_families_credits: 379.2 + 1_000
+
+- name: 2025 a 17-year-old gets the child tax credit and no older-child amount
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      parent:
+        age: 40
+        employment_income: 10_000
+      child:
+        age: 17
+        is_tax_unit_dependent: true
+        is_full_time_student: false
+    tax_units:
+      tax_unit:
+        members: [parent, child]
+    households:
+      household:
+        members: [parent, child]
+        state_code: MN
+  output:
+    # Under 18 at the end of the year (M1DQC step 4, row 10): CTC $1,750
+    # plus the $379.20 WFC base, no qualifying older child amount.
+    mn_child_and_working_families_credits: 379.2 + 1_750
+
+- name: 2025 a 19-year-old who is not a student is not a qualifying older child
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      parent:
+        age: 40
+        employment_income: 10_000
+      child:
+        age: 19
+        is_tax_unit_dependent: true
+        is_full_time_student: false
+    tax_units:
+      tax_unit:
+        members: [parent, child]
+    households:
+      household:
+        members: [parent, child]
+        state_code: MN
+  output:
+    # Not a student and not under 19 (M1DQC step 8): WFC base $379.20 only.
+    mn_child_and_working_families_credits: 379.2
+
+- name: 2025 a disabled 18-year-old is a qualifying older child
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      parent:
+        age: 40
+        employment_income: 10_000
+      child:
+        age: 18
+        is_tax_unit_dependent: true
+        is_full_time_student: false
+        is_permanently_and_totally_disabled: true
+    tax_units:
+      tax_unit:
+        members: [parent, child]
+    households:
+      household:
+        members: [parent, child]
+        state_code: MN
+  output:
+    # Disabled and not under 18 (M1DQC step 4 sends the child to row 11).
+    mn_child_and_working_families_credits: 379.2 + 1_000
+
+- name: 2025 an 18-year-old older child above the phase-out start
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      parent:
+        age: 40
+        employment_income: 40_000
+      child:
+        age: 18
+        is_tax_unit_dependent: true
+        is_full_time_student: false
+    tax_units:
+      tax_unit:
+        members: [parent, child]
+    households:
+      household:
+        members: [parent, child]
+        state_code: MN
+  output:
+    # $379.20 + $1,000, less 9% of the income above the $31,950 phase-out
+    # start (2025 Schedule M1CWFC): 1,379.20 - 0.09 x 8,050 = 654.70.
+    mn_child_and_working_families_credits: 654.7
+
 # Minnesota decouples from IRC 32(m) (Minn. Stat. 290.0661/290.0671), so an
 # ITIN child (ssn_card_type OTHER_NON_CITIZEN, no SSN valid for employment)
 # receives the same MN CTC as a citizen child. This mirrors the "2025 Joint

policyengine_us/variables/gov/states/mn/tax/income/credits/mn_child_and_working_families_credits.py

@@ -37,23 +37,17 @@ def formula(tax_unit, period, parameters):
         base_wfc_credit = p.wfc.phase_in.calc(earnings)
         person = tax_unit.members
         # Minn. Stat. 290.0671, subd. 1a defines a qualifying older child as
-        # an IRC 32(c) qualifying child that attained at least age 18; the
-        # IRC 32(c)(3) definition incorporates IRC 152(c)(3)(B), which waives
-        # the age (and student) test for permanently and totally disabled
-        # individuals, and the IRC 152(c)(2) relationship test. Schedule M1DQC
-        # step 4 routes a disabled dependent aged 18 or older directly to the
-        # qualifying-older-child row (row 11) without the full-time-student
-        # test.
-        is_disabled_dependent = person("is_tax_unit_dependent", period) & person(
-            "is_permanently_and_totally_disabled", period
-        )
+        # an IRC 32(c) qualifying child that attained at least age 18. IRC
+        # 32(c)(3) uses the IRC 152(c)(3) age test (under 19, under 24 if a
+        # full-time student, or any age if permanently and totally disabled)
+        # and the IRC 152(c)(2) relationship test. Schedule M1DQC steps 4-8
+        # follow it: an 18-year-old qualifies whether or not a student, a 19-
+        # to 23-year-old only as a full-time student, and a disabled child
+        # aged 18 or older always.
         qualifying_child = person("is_eitc_qualifying_child", period)
         age = person("age", period)
-        full_time_student = person("is_full_time_student", period)
-        qualifying_older_child = (
-            qualifying_child
-            & (age > p.wfc.additional.age_threshold)
-            & (full_time_student | is_disabled_dependent)
+        qualifying_older_child = qualifying_child & (
+            age >= p.wfc.additional.age_threshold
         )
         qualifying_older_children = tax_unit.sum(qualifying_older_child)
         additional_wfc_credit = p.wfc.additional.amount.calc(qualifying_older_children)