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Merge pull request #2790 from martinholmer/fix-etc-phaseout
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Fix education tax credit phase-out parameters
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@martinholmer
martinholmer authored Aug 3, 2024
2 parents 728d81a + 923b4f2 commit b3efee0
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Showing 5 changed files with 20 additions and 17 deletions.
11 changes: 7 additions & 4 deletions taxcalc/calcfunctions.py
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Original file line number Diff line number Diff line change
Expand Up @@ -2809,7 +2809,7 @@ def SchR(age_head, age_spouse, MARS, c00100,


@iterate_jit(nopython=True)
def EducationTaxCredit(exact, e87530, MARS, c00100, num, c05800,
def EducationTaxCredit(exact, e87530, MARS, c00100, c05800,
e07300, c07180, c07200, c87668,
LLC_Expense_c, ETC_pe_Single, ETC_pe_Married,
CR_Education_hc,
Expand All @@ -2828,8 +2828,6 @@ def EducationTaxCredit(exact, e87530, MARS, c00100, num, c05800,
Filing (marital) status. (1=single, 2=joint, 3=separate, 4=household-head, 5=widow(er))
c00100: float
Adjusted Gross Income (AGI)
num: int
2 when MARS is 2 (married filing jointly), otherwise 1
c05800: float
Total (regular + AMT) income tax liability before credits
e07300: float
Expand Down Expand Up @@ -2860,14 +2858,19 @@ def EducationTaxCredit(exact, e87530, MARS, c00100, num, c05800,
-----
Tax Law Parameters that are not parameterized:
0.2: Lifetime Learning Credit ratio against expense
10000.0: AGI range bewteen ETC_pe_Single and single phase-out start;
twice this amount for ETC_pe_Married
"""
c87560 = 0.2 * min(e87530, LLC_Expense_c)
# on the following credit phase-out law see:
# https://www.law.cornell.edu/uscode/text/26/25A#d_1
if MARS == 2:
c87570 = ETC_pe_Married * 1000.
c87600 = 20000.
else:
c87570 = ETC_pe_Single * 1000.
c87600 = 10000.
c87590 = max(0., c87570 - c00100)
c87600 = 10000. * num
if exact == 1: # exact calculation as on tax forms
c87610 = min(1., round(c87590 / c87600, 3))
else:
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14 changes: 7 additions & 7 deletions taxcalc/policy_current_law.json
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Expand Up @@ -19804,13 +19804,13 @@
}
},
"ETC_pe_Single": {
"title": "Education tax credit phaseout ends (Single)",
"description": "The education tax credit will be zero for those taxpayers of single filing status with modified AGI (in thousands) higher than this level.",
"title": "Education tax credit phaseout ends (single and other non-joint)",
"description": "The education tax credit will be zero for those taxpayers of non-joint filing status with modified AGI (in thousands) higher than this level.",
"notes": "",
"section_1": "",
"section_2": "",
"indexable": true,
"indexed": true,
"indexed": false,
"type": "float",
"value": [
{
Expand Down Expand Up @@ -19851,7 +19851,7 @@
},
{
"year": 2022,
"value": 80.0
"value": 90.0
}
],
"validators": {
Expand All @@ -19866,13 +19866,13 @@
}
},
"ETC_pe_Married": {
"title": "Education tax credit phaseout ends (Married)",
"description": "The education tax credit will be zero for those taxpayers of married filing status with modified AGI level (in thousands) higher than this level.",
"title": "Education tax credit phaseout ends (joint)",
"description": "The education tax credit will be zero for those taxpayers of married filing joint status with modified AGI level (in thousands) higher than this level.",
"notes": "",
"section_1": "",
"section_2": "",
"indexable": true,
"indexed": true,
"indexed": false,
"type": "float",
"value": [
{
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2 changes: 1 addition & 1 deletion taxcalc/reforms/rounding2022.json
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Original file line number Diff line number Diff line change
Expand Up @@ -129,7 +129,7 @@
"ETC_pe_Single": {"2019": 68,
"2020": 69,
"2021": 90,
"2022": 80},
"2022": 90},
"ETC_pe_Married": {"2019": 136,
"2020": 138,
"2021": 180,
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4 changes: 2 additions & 2 deletions taxcalc/tests/puf_var_wght_means_by_year.csv
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Original file line number Diff line number Diff line change
Expand Up @@ -6,7 +6,7 @@ c04600,Post-phase-out personal exemption, 7105, 7131, 7163, 7217,
c04800,Federal regular taxable income, 35753, 39297, 39663, 39591, 42568, 44523, 45416, 46476, 55959, 54603, 57322, 58386, 60072, 61575, 63147, 64912, 66832, 68828, 70916, 73686, 74836, 76970
c05200,Regular tax on taxable income, 7671, 8731, 8725, 8584, 9499, 10001, 10138, 10475, 13361, 12576, 13165, 13230, 13561, 13847, 14165, 14544, 14965, 15398, 15840, 16404, 16817, 17279
c07180,Child care credit, 17, 17, 17, 17, 17, 17, 17, 17, 0, 17, 17, 17, 17, 17, 17, 17, 17, 17, 17, 17, 16, 16
c07220,Child tax credit (adjusted), 158, 155, 147, 143, 139, 134, 129, 124, 359, 116, 107, 101, 97, 94, 91, 88, 85, 82, 79, 77, 74, 72
c07220,Child tax credit (adjusted), 158, 155, 147, 143, 139, 134, 129, 124, 359, 116, 107, 101, 97, 94, 91, 88, 85, 82, 80, 77, 74, 72
c09600,Federal AMT liability, 212, 227, 240, 251, 268, 280, 288, 317, 351, 339, 347, 357, 371, 387, 400, 415, 430, 446, 458, 487, 496, 513
c11070,Extra child tax credit (refunded), 150, 144, 138, 133, 126, 122, 119, 120, 0, 108, 109, 109, 107, 105, 103, 101, 100, 98, 96, 95, 94, 92
c21040,Itemized deduction that is phased out, 203, 242, 231, 219, 255, 271, 271, 286, 379, 349, 364, 360, 367, 372, 379, 388, 397, 406, 414, 421, 451, 461
Expand Down Expand Up @@ -67,7 +67,7 @@ e87530,Adjusted qualified lifetime learning expenses for all students, 93,
eitc,Federal EITC, 376, 369, 364, 352, 342, 340, 341, 347, 324, 335, 363, 385, 391, 395, 399, 403, 407, 411, 417, 425, 429, 436
elderly_dependents,number of dependents age 65+ in filing unit excluding taxpayer and spouse, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0
g20500,Itemizable gross (before 10% AGI disregard) casualty or theft loss, 29, 30, 31, 32, 33, 35, 36, 38, 40, 41, 42, 44, 47, 48, 50, 52, 55, 57, 60, 63, 62, 66
iitax,Federal income tax liability, 6550, 7474, 7521, 7477, 8281, 8755, 8951, 6544, 9148, 11187, 11705, 11832, 12199, 12529, 12871, 13262, 13686, 14117, 14554, 15116, 15514, 15967
iitax,Federal income tax liability, 6550, 7474, 7521, 7477, 8281, 8755, 8952, 6544, 9149, 11189, 11708, 11835, 12204, 12533, 12876, 13267, 13691, 14122, 14560, 15122, 15521, 15974
k1bx14p,Partner self-employment earnings/loss for taxpayer (included in e26270 total), -213, -239, -187, -162, -144, -139, -133, -129, -156, -168, -183, -181, -178, -175, -168, -158, -146, -124, -103, -67, -149, -123
k1bx14s,Partner self-employment earnings/loss for spouse (included in e26270 total), -7, -9, 0, 2, 8, 10, 11, 11, 13, 14, 14, 14, 15, 16, 18, 21, 25, 27, 31, 34, 28, 33
nu06,Number of dependents under 6 years old, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0
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6 changes: 3 additions & 3 deletions taxcalc/tests/pufcsv_agg_expect.csv
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Expand Up @@ -13,12 +13,12 @@ AMT Liability ($b),51.3,22.1,23.0,25.1,27.8,27.4,28.8,30.3,31.8,85.1
AMT Filers (#m),5.7,0.2,0.2,0.3,0.4,0.3,0.3,0.3,0.3,7.4
Tax before Credits ($b),1708.1,1734.4,1801.1,1863.4,2309.4,2310.1,2450.5,2518.3,2631.0,2877.6
Refundable Credits ($b),102.9,117.5,118.5,642.0,802.6,119.2,127.0,133.0,135.2,121.9
Nonrefundable Credits ($b),67.0,127.3,129.2,128.5,47.6,140.9,143.3,144.0,145.9,78.0
Nonrefundable Credits ($b),67.0,127.3,129.2,128.5,47.6,141.0,143.3,143.9,145.7,77.7
Reform Surtaxes ($b),0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0
Other Taxes ($b),40.0,44.8,43.6,52.9,84.9,61.5,66.5,65.2,66.0,64.2
Ind Income Tax ($b),1578.2,1534.3,1597.0,1145.8,1544.0,2111.6,2246.7,2306.5,2415.9,2742.0
Ind Income Tax ($b),1578.2,1534.3,1597.0,1145.8,1544.0,2111.5,2246.7,2306.7,2416.1,2742.2
Payroll Taxes ($b),1083.8,1133.3,1185.4,1209.0,1306.0,1403.4,1489.3,1563.9,1637.9,1711.0
Combined Liability ($b),2662.0,2667.7,2782.4,2354.8,2850.0,3515.0,3736.0,3870.5,4053.8,4452.9
Combined Liability ($b),2662.0,2667.7,2782.4,2354.8,2850.0,3514.9,3736.0,3870.6,4054.0,4453.2
With Income Tax <= 0 (#m),92.8,98.6,99.7,131.7,125.0,100.3,101.9,103.4,104.4,101.0
With Combined Tax <= 0 (#m),63.4,65.6,66.8,102.1,94.5,68.9,70.2,71.6,72.6,72.4
UBI Benefits ($b),0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0
Expand Down

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