Attribute the standard and itemized deductions in Montana to each spouse respectively

changelog_entry.yaml

@@ -0,0 +1,4 @@
+- bump: patch
+  changes:
+    fixed:
+    - Attribute the standard and itemized deductions in Montana to each spouse respectively.

policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/deductions/mt_tax_unit_deductions_exemptions_indiv.yaml → policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/deductions/mt_deductions_indiv.yaml

@@ -6,7 +6,7 @@
     mt_itemized_deductions_indiv: 10_000
     mt_tax_unit_itemizes: true
   output:
-    mt_tax_unit_deductions_exemptions_indiv: 10_000
+    mt_deductions_indiv: 10_000
 
 - name: Tax unit does not itemize
   period: 2021
@@ -16,4 +16,4 @@
     mt_itemized_deductions_indiv: 10_000
     mt_tax_unit_itemizes: false
   output:
-    mt_tax_unit_deductions_exemptions_indiv: 12_950
+    mt_deductions_indiv: 12_950

policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/deductions/mt_head_deductions_exemptions_indiv.yaml → policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/deductions/mt_head_dependent_exemptions_indiv.yaml

@@ -5,21 +5,22 @@
       person1:
         is_tax_unit_head: true
         mt_agi: 20_000
+        mt_dependent_exemptions_person: 5_000
       person2:
         is_tax_unit_spouse: true
         mt_agi: 18_000
+        mt_dependent_exemptions_person: 5_000
       person3:
         mt_agi: 0
     tax_units:
       tax_unit:
         members: [person1, person2, person3]
-        mt_tax_unit_deductions_exemptions_indiv: 10_000
     households:
       household:
         members: [person1, person2, person3]
         state_code: MT
   output:
-    mt_head_deductions_exemptions_indiv: 6_000
+    mt_head_dependent_exemptions_indiv: 6_000
 
 - name: The AGI difference is attributed to the person with the higher AGI and the rest is halved, spouse larger AGI
   period: 2021
@@ -28,21 +29,22 @@
       person1:
         is_tax_unit_head: true
         mt_agi: 10_000
+        mt_dependent_exemptions_person: 5_000
       person2:
         is_tax_unit_spouse: true
         mt_agi: 18_000
+        mt_dependent_exemptions_person: 5_000
       person3:
         mt_agi: 0
     tax_units:
       tax_unit:
         members: [person1, person2, person3]
-        mt_tax_unit_deductions_exemptions_indiv: 10_000
     households:
       household:
         members: [person1, person2, person3]
         state_code: MT
   output:
-    mt_head_deductions_exemptions_indiv: 1_000
+    mt_head_dependent_exemptions_indiv: 1_000
 
 - name: Head has greater AGI and deductions are below the delta
   period: 2021
@@ -51,21 +53,22 @@
       person1:
         is_tax_unit_head: true
         mt_agi: 20_000
+        mt_dependent_exemptions_person: 0
       person2:
         is_tax_unit_spouse: true
         mt_agi: 18_000
+        mt_dependent_exemptions_person: 1_000
       person3:
         mt_agi: 0
     tax_units:
       tax_unit:
         members: [person1, person2, person3]
-        mt_tax_unit_deductions_exemptions_indiv: 1_000
     households:
       household:
         members: [person1, person2, person3]
         state_code: MT
   output:
-    mt_head_deductions_exemptions_indiv: 1_000
+    mt_head_dependent_exemptions_indiv: 1_000
 
 - name: Spouse has greater AGI and deductions are below the delta
   period: 2021
@@ -74,18 +77,19 @@
       person1:
         is_tax_unit_head: true
         mt_agi: 18_000
+        mt_dependent_exemptions_person: 200
       person2:
         is_tax_unit_spouse: true
         mt_agi: 20_000
+        mt_dependent_exemptions_person: 800
       person3:
         mt_agi: 0
     tax_units:
       tax_unit:
         members: [person1, person2, person3]
-        mt_tax_unit_deductions_exemptions_indiv: 1_000
     households:
       household:
         members: [person1, person2, person3]
         state_code: MT
   output:
-    mt_head_deductions_exemptions_indiv: 0
+    mt_head_dependent_exemptions_indiv: 0

policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/integration.yaml

@@ -64,39 +64,30 @@
     mt_personal_exemptions_indiv: [2_580, 2_580, 0, 0, 0, 0]
     mt_dependent_exemptions_person: [0, 0, 2_580, 2_580, 2_580, 2_580]
 
-- name: Tax unit with taxsimid 34790 in e21.its.csv and e21.ots.csv
+- name: Tax unit with taxsimid 22630 in e21.its.csv and e21.ots.csv
   absolute_error_margin: 0.01
   period: 2021
   input:
     people:
       person1:
-        age: 33
-        employment_income: 7_010
+        age: 59
         taxable_interest_income: 5_505
       person2:
-        age: 33
-        employment_income: 136_010
+        age: 59
+        employment_income: 27010
         taxable_interest_income: 5_505
-      person3:
-        age: 16
-      person4:
-        age: 16
-      person5:
-        age: 16
-      person6:
-        age: 16
     tax_units:
       tax_unit:
-        members: [person1, person2, person3, person4, person5, person6]
+        members: [person1, person2]
         premium_tax_credit: 0  # not in TAXSIM35
     spm_units:
       spm_unit:
-        members: [person1, person2, person3, person4, person5, person6]
+        members: [person1, person2]
         snap: 0  # not in TAXSIM35
         tanf: 0  # not in TAXSIM35
     households:
       household:
-        members: [person1, person2, person3, person4, person5, person6]
+        members: [person1, person2]
         state_fips: 30  # MT
-  output:  # expected results from patched TAXSIM35 2024-03-09 version
-    mt_income_tax: 7_812.64
+  output:  # expected results from patched TAXSIM35 2024-03-21 version
+    mt_income_tax: 1140.90

policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/mt_taxable_income_indiv.yaml

@@ -67,7 +67,7 @@
         members: [person1, person2]
         state_code: MT
   output:
-    mt_taxable_income_indiv: [0, 0]
+    mt_taxable_income_indiv: [1_000, 0]
 
 - name: First, the gap between spouse and head is closed, after which the amount is allocated equally
   period: 2021
@@ -94,7 +94,7 @@
         members: [person1, person2]
         state_code: MT
   output:
-    mt_taxable_income_indiv: [4_000, 4_000]
+    mt_taxable_income_indiv: [2_000, 6_000]
 
 - name: If the AGI is equal, the amount is allocated equally, excluding the exemptions
   period: 2021
@@ -123,4 +123,4 @@
         members: [person1, person2, person3]
         state_code: MT
   output:
-    mt_taxable_income_indiv: [12_000, 14_000, 0]
+    mt_taxable_income_indiv: [11_000, 15_000, 0]

policyengine_us/variables/gov/states/mt/tax/income/deductions/mt_deductions_indiv.py

@@ -0,0 +1,15 @@
+from policyengine_us.model_api import *
+
+
+class mt_deductions_indiv(Variable):
+    value_type = float
+    entity = Person
+    label = "The total amount of Montana deductions and exemptions when married filing separately"
+    unit = USD
+    definition_period = YEAR
+
+    def formula(person, period, parameters):
+        standard_deduction = person("mt_standard_deduction_indiv", period)
+        itemized_deductions = person("mt_itemized_deductions_indiv", period)
+        itemizes = person.tax_unit("mt_tax_unit_itemizes", period)
+        return where(itemizes, itemized_deductions, standard_deduction)

policyengine_us/variables/gov/states/mt/tax/income/deductions/mt_head_deductions_exemptions_indiv.py → policyengine_us/variables/gov/states/mt/tax/income/deductions/mt_head_dependent_exemptions_indiv.py

@@ -1,7 +1,7 @@
 from policyengine_us.model_api import *
 
 
-class mt_head_deductions_exemptions_indiv(Variable):
+class mt_head_dependent_exemptions_indiv(Variable):
     value_type = float
     entity = TaxUnit
     label = "The total amount of Montana deductions and exemptions when married filing separately attributed to the head of the tax unit"
@@ -11,8 +11,8 @@ class mt_head_deductions_exemptions_indiv(Variable):
     def formula(tax_unit, period, parameters):
         person = tax_unit.members
         mt_agi = person("mt_agi", period)
-        total_deductions_exemptions = tax_unit(
-            "mt_tax_unit_deductions_exemptions_indiv", period
+        dependent_exemptions = add(
+            tax_unit, period, ["mt_dependent_exemptions_person"]
         )
         head = person("is_tax_unit_head", period)
         spouse = person("is_tax_unit_spouse", period)
@@ -23,15 +23,15 @@ def formula(tax_unit, period, parameters):
         # The head only gets this portion if they have larger AGI.
         agi_difference = np.abs(head_agi - spouse_agi)
         deductions_capped_at_agi_difference = min_(
-            agi_difference, total_deductions_exemptions
+            agi_difference, dependent_exemptions
         )
         equalizing_amount = (
             deductions_capped_at_agi_difference * head_exceeds_spouse_agi
         )
         # Halve the remaining deductions amount
         # Both head and spouse receive this amount.
         remaining_deductions_exemptions = (
-            total_deductions_exemptions - deductions_capped_at_agi_difference
+            dependent_exemptions - deductions_capped_at_agi_difference
         )
         halved_remaining_deductions = remaining_deductions_exemptions / 2
         return halved_remaining_deductions + equalizing_amount

policyengine_us/variables/gov/states/mt/tax/income/mt_taxable_income_indiv.py

@@ -16,15 +16,16 @@ class mt_taxable_income_indiv(Variable):
     def formula(person, period, parameters):
         mt_agi = person("mt_agi", period)
         exemptions = person("mt_personal_exemptions_indiv", period)
-        reduced_agi = max_(mt_agi - exemptions, 0)
-        deductions_and_exemptions = person.tax_unit(
-            "mt_tax_unit_deductions_exemptions_indiv", period
+        deductions = person("mt_deductions_indiv", period)
+        reduced_agi = max_(mt_agi - exemptions - deductions, 0)
+        dependent_exemptions = add(
+            person.tax_unit, period, ["mt_dependent_exemptions_person"]
         )
         head = person("is_tax_unit_head", period)
         head_deductions = person.tax_unit(
-            "mt_head_deductions_exemptions_indiv", period
+            "mt_head_dependent_exemptions_indiv", period
         )
-        spouse_deductions = deductions_and_exemptions - head_deductions
+        spouse_deductions = dependent_exemptions - head_deductions
         capped_head_agi = max_(reduced_agi - head_deductions, 0)
         capped_spouse_agi = max_(reduced_agi - spouse_deductions, 0)
         return where(head, capped_head_agi, capped_spouse_agi)