Decouple California CDCC calculation from ARPA in 2021 (#3224)

* Decouple California CDCC calculation from ARPA in 2021 Fixes #2060 * Decouple California CDCC calculation from ARPA in 2021 Fixes #2060 * California cdcc * Decouple California CDCC calculation from ARPA in 2021 Fixes #2060 * Update policyengine_us/variables/gov/states/ca/tax/income/credits/ca_federal_capped_cdcc.py * Decouple California CDCC calculation from ARPA in 2021 Fixes #2060 * Decouple California CDCC calculation from ARPA in 2021 Fixes #2060 * Decouple California CDCC calculation from ARPA in 2021 Fixes #2060 * format --------- Co-authored-by: Pavel Makarchuk <[email protected]>
PolicyEngine · Nov 15, 2023 · 5bb6097 · 5bb6097
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diff --git a/changelog_entry.yaml b/changelog_entry.yaml
@@ -0,0 +1,4 @@
+- bump: minor
+  changes:
+    added:
+    - Replicated Child and Dependent Care Expenses Credit to include California limitations.
diff --git a/policyengine_us/parameters/gov/states/ca/tax/income/credits/child_dependent_care/input.yaml b/policyengine_us/parameters/gov/states/ca/tax/income/credits/child_dependent_care/input.yaml
@@ -0,0 +1,15 @@
+description: California uses this input for the state child/dependent care credit, based on year.  
+values:
+  2012-01-01:
+  - cdcc
+  2021-01-01:
+  - ca_federal_capped_cdcc
+  2022-01-01:
+  - cdcc
+metadata:
+  unit: list
+  period: year 
+  label: California child/dependent care credit input
+  reference: 
+    - title: Details of Public Law 117-2, section 9631
+      href: https://www.ftb.ca.gov/about-ftb/data-reports-plans/Summary-of-Federal-Income-Tax-Changes/index.html#PL-117-2-9631
diff --git a/policyengine_us/tests/policy/baseline/gov/states/ca/tax/income/credits/ca_cdcc.yaml b/policyengine_us/tests/policy/baseline/gov/states/ca/tax/income/credits/ca_cdcc.yaml
diff --git a/.../tests/policy/baseline/gov/states/ca/tax/income/credits/child_dependent_care/ca_cdcc.yaml b/.../tests/policy/baseline/gov/states/ca/tax/income/credits/child_dependent_care/ca_cdcc.yaml
@@ -0,0 +1,79 @@
+- name: 2021 filer with AGI above $100,000 is not eligible.
+  period: 2021
+  input:
+    state_code: CA
+    adjusted_gross_income: 100_001
+    cdcc: 0
+    ca_federal_capped_cdcc: 1_000
+  output:
+    ca_cdcc: 0
+
+- name: 2021 filer with income at the 50% match level.
+  period: 2021
+  input:
+    state_code: CA
+    adjusted_gross_income: 1_000
+    cdcc: 0
+    ca_federal_capped_cdcc: 1_000
+  output:
+    ca_cdcc: 500
+
+- name: 2021 filer with income at the 43% match level.
+  period: 2021
+  input:
+    state_code: CA
+    adjusted_gross_income: 50_000
+    cdcc: 0
+    ca_federal_capped_cdcc: 1_000
+  output:
+    ca_cdcc: 430
+
+- name: 2021 filer with negative AGI gets a 50% match.
+  period: 2021
+  input:
+    state_code: CA
+    adjusted_gross_income: -50_000
+    cdcc: 0
+    ca_federal_capped_cdcc: 1_000
+  output:
+    ca_cdcc: 500
+
+- name: 2022 filer with AGI above $100,000 is not eligible.
+  period: 2022
+  input:
+    state_code: CA
+    adjusted_gross_income: 100_001
+    cdcc: 1_000
+    ca_federal_capped_cdcc: 0
+  output:
+    ca_cdcc: 0
+
+- name: 2022 filer with income at the 50% match level.
+  period: 2022
+  input:
+    state_code: CA
+    adjusted_gross_income: 1_000
+    cdcc: 1_000
+    ca_federal_capped_cdcc: 0
+  output:
+    ca_cdcc: 500
+
+- name: 2022 filer with income at the 43% match level.
+  period: 2022
+  input:
+    state_code: CA
+    adjusted_gross_income: 50_000
+    cdcc: 1_000
+    ca_federal_capped_cdcc: 0
+  output:
+    ca_cdcc: 430
+
+- name: 2022 filer with negative AGI gets a 50% match.
+  period: 2022
+  input:
+    state_code: CA
+    adjusted_gross_income: -50_000
+    cdcc: 1_000
+    ca_federal_capped_cdcc: 0
+  output:
+    ca_cdcc: 500
diff --git a/...s/policy/baseline/gov/states/ca/tax/income/credits/child_dependent_care/ca_cdcc_rate.yaml b/...s/policy/baseline/gov/states/ca/tax/income/credits/child_dependent_care/ca_cdcc_rate.yaml
@@ -0,0 +1,47 @@
+- name: test 1 
+  period: 2019
+  input:
+    state_code: CA
+    adjusted_gross_income: 100_000
+  output:
+    ca_cdcc_rate: 0.2
+
+- name: test 2
+  period: 2021
+  input:
+    state_code: CA
+    adjusted_gross_income: 100_000
+  output:
+    ca_cdcc_rate: 0.2
+
+- name: test 3
+  period: 2022
+  input:
+    state_code: CA
+    adjusted_gross_income: 100_000
+  output:
+    ca_cdcc_rate: 0.2
+
+- name: test 4
+  period: 2022
+  input:
+    state_code: CA
+    adjusted_gross_income: 45_000
+  output:
+    ca_cdcc_rate: 0.2
+
+- name: test 5
+  period: 2022
+  input:
+    state_code: CA
+    adjusted_gross_income: 35_000
+  output:
+    ca_cdcc_rate: 0.25
+
+- name: test 6
+  period: 2022
+  input:
+    state_code: CA
+    adjusted_gross_income: 15_000
+  output:
+    ca_cdcc_rate: 0.35
diff --git a/...line/gov/states/ca/tax/income/credits/child_dependent_care/ca_cdcc_relevant_expenses.yaml b/...line/gov/states/ca/tax/income/credits/child_dependent_care/ca_cdcc_relevant_expenses.yaml
@@ -0,0 +1,49 @@
+- name: test 1
+  period: 2019
+  input:
+    state_code: CA
+    tax_unit_childcare_expenses: 10_000
+    count_cdcc_eligible: 1
+    min_head_spouse_earned: 50_000
+  output:
+    ca_cdcc_relevant_expenses: 3_000 
+
+- name: test 2
+  period: 2021
+  input:
+    state_code: CA
+    tax_unit_childcare_expenses: 10_000
+    count_cdcc_eligible: 1
+    min_head_spouse_earned: 50_000
+  output:
+    ca_cdcc_relevant_expenses: 3_000 
+
+- name: test 3
+  period: 2022
+  input:
+    state_code: CA
+    tax_unit_childcare_expenses: 10_000
+    count_cdcc_eligible: 1
+    min_head_spouse_earned: 50_000
+  output:
+    ca_cdcc_relevant_expenses: 3_000 
+
+- name: test 4
+  period: 2022
+  input:
+    state_code: CA
+    tax_unit_childcare_expenses: 20_000
+    count_cdcc_eligible: 3
+    min_head_spouse_earned: 50_000
+  output:
+    ca_cdcc_relevant_expenses: 6_000 
+
+- name: test 5
+  period: 2022
+  input:
+    state_code: CA
+    tax_unit_childcare_expenses: 35_000
+    count_cdcc_eligible: 4
+    min_head_spouse_earned: 40_000
+  output:
+    ca_cdcc_relevant_expenses: 6_000 
diff --git a/...aseline/gov/states/ca/tax/income/credits/child_dependent_care/ca_federal_capped_cdcc.yaml b/...aseline/gov/states/ca/tax/income/credits/child_dependent_care/ca_federal_capped_cdcc.yaml
@@ -0,0 +1,39 @@
+- name: test 1
+  period: 2019
+  input:
+    state_code: CA
+    ca_federal_cdcc: 1_500
+    income_tax_before_credits: 5_000
+    foreign_tax_credit: 0
+  output:
+    ca_federal_capped_cdcc: 1_500
+
+- name: test 2
+  period: 2021
+  input:
+    state_code: CA
+    ca_federal_cdcc: 1_500
+    income_tax_before_credits: 5_000
+    foreign_tax_credit: 0
+  output:
+    ca_federal_capped_cdcc: 1_500
+
+- name: test 3
+  period: 2022
+  input:
+    state_code: CA
+    ca_federal_cdcc: 800
+    income_tax_before_credits: 5_000
+    foreign_tax_credit: 500
+  output:
+    ca_federal_capped_cdcc: 800
+
+- name: test 4
+  period: 2022
+  input:
+    state_code: CA
+    ca_federal_cdcc: 1_500
+    income_tax_before_credits: 2_000
+    foreign_tax_credit: 800
+  output:
+    ca_federal_capped_cdcc: 1_200
diff --git a/...olicy/baseline/gov/states/ca/tax/income/credits/child_dependent_care/ca_federal_cdcc.yaml b/...olicy/baseline/gov/states/ca/tax/income/credits/child_dependent_care/ca_federal_cdcc.yaml
@@ -0,0 +1,44 @@
+- name: test 1
+  period: 2019
+  input:
+    state_code: CA
+    ca_cdcc_relevant_expenses: 6_000
+    ca_cdcc_rate: 0.25
+  output:
+    ca_federal_cdcc: 1_500
+
+- name: test 2
+  period: 2021
+  input:
+    state_code: CA
+    ca_cdcc_relevant_expenses: 6_000
+    ca_cdcc_rate: 0.25
+  output:
+    ca_federal_cdcc: 1_500
+
+- name: test 3
+  period: 2022
+  input:
+    state_code: CA
+    ca_cdcc_relevant_expenses: 6_000
+    ca_cdcc_rate: 0.25
+  output:
+    ca_federal_cdcc: 1_500
+
+- name: test 4
+  period: 2022
+  input:
+    state_code: CA
+    ca_cdcc_relevant_expenses: 4_000
+    ca_cdcc_rate: 0.2
+  output:
+    ca_federal_cdcc: 800
+
+- name: test 5
+  period: 2022
+  input:
+    state_code: CA
+    ca_cdcc_relevant_expenses: 3_000
+    ca_cdcc_rate: 0.35
+  output:
+    ca_federal_cdcc: 1_050
diff --git a/...ts/policy/baseline/gov/states/ca/tax/income/credits/child_dependent_care/integration.yaml b/...ts/policy/baseline/gov/states/ca/tax/income/credits/child_dependent_care/integration.yaml
@@ -0,0 +1,48 @@
+- name: Tax unit with taxsimid 37810 in g21.its.csv and g21.ots.csv
+  absolute_error_margin: 0.01
+  period: 2021
+  input:
+    people:
+      person1:
+        is_tax_unit_head: true
+        age: 58
+        employment_income: 74_010
+        taxable_interest_income: 11_010
+        taxable_private_pension_income: 10_000
+        social_security: 2_000
+        rent: 9_000
+        ssi: 0  # not in TAXSIM35
+        state_supplement: 0  # not in TAXSIM35
+        wic: 0  # not in TAXSIM35
+      person2:
+        age: 11
+        ssi: 0  # not in TAXSIM35
+        state_supplement: 0  # not in TAXSIM35
+        wic: 0  # not in TAXSIM35
+      person3:
+        age: 11
+        ssi: 0  # not in TAXSIM35
+        state_supplement: 0  # not in TAXSIM35
+        wic: 0  # not in TAXSIM35
+      person4:
+        age: 16
+        ssi: 0  # not in TAXSIM35
+        state_supplement: 0  # not in TAXSIM35
+        wic: 0  # not in TAXSIM35
+    spm_units:
+      spm_unit:
+        members: [person1, person2, person3, person4]
+        snap: 0  # not in TAXSIM35
+        tanf: 0  # not in TAXSIM35
+    tax_units:
+      tax_unit:
+        members: [person1, person2, person3, person4]
+        tax_unit_childcare_expenses: 10_000
+        premium_tax_credit: 0  # not in TAXSIM35
+        ca_use_tax: 0  # not in TAXSIM35
+    households:
+      household:
+        members: [person1, person2, person3, person4]
+        state_code: CA
+  output:  # expected results from patched TAXSIM35 2023-03-28 version
+    ca_cdcc: 408
diff --git a/policyengine_us/variables/gov/states/ca/tax/income/credits/ca_cdcc.py b/policyengine_us/variables/gov/states/ca/tax/income/credits/ca_cdcc.py
@@ -17,6 +17,6 @@ def formula(tax_unit, period, parameters):
             period
         ).gov.states.ca.tax.income.credits.child_dependent_care
         agi = tax_unit("adjusted_gross_income", period)
-        federal_cdcc = tax_unit("cdcc", period)
+        federal_cdcc = add(tax_unit, period, p.input)
         rate = p.rate.calc(agi)
         return federal_cdcc * rate