Is the NY CTC a match of the federal CTC before or after limiting by tax liability?

[martinholmer]

The following integration test fails. It is not yet known whether the
tax logic problem is in TAXSIM35 or in the current PEUS code, or
whether there are problems in both models. This topic is meant to
facilitate discussion of why this test fails, primarily by reporting
the results of hand calculations required to fill out the relevant tax
form.

- name: Tax unit with taxsimid 92522 in e21.its.csv and e21.ots.csv
  absolute_error_margin: 0.01
  period: 2021
  input:
    people:
      person1:
        age: 67
        employment_income: 23010
        taxable_interest_income: 5505.0
        ssi: 0  # not in TAXSIM35
        state_supplement: 0  # not in TAXSIM35
        wic: 0  # not in TAXSIM35
        ma_covid_19_essential_employee_premium_pay_program: 0  # not in TAXSIM35
      person2:
        age: 67
        employment_income: 2010
        taxable_interest_income: 5505.0
        ssi: 0  # not in TAXSIM35
        state_supplement: 0  # not in TAXSIM35
        wic: 0  # not in TAXSIM35
        ma_covid_19_essential_employee_premium_pay_program: 0  # not in TAXSIM35
      person3:
        age: 11
        ssi: 0  # not in TAXSIM35
        state_supplement: 0  # not in TAXSIM35
        wic: 0  # not in TAXSIM35
        ma_covid_19_essential_employee_premium_pay_program: 0  # not in TAXSIM35
      person4:
        age: 11
        ssi: 0  # not in TAXSIM35
        state_supplement: 0  # not in TAXSIM35
        wic: 0  # not in TAXSIM35
        ma_covid_19_essential_employee_premium_pay_program: 0  # not in TAXSIM35
      person5:
        age: 11
        ssi: 0  # not in TAXSIM35
        state_supplement: 0  # not in TAXSIM35
        wic: 0  # not in TAXSIM35
        ma_covid_19_essential_employee_premium_pay_program: 0  # not in TAXSIM35
      person6:
        age: 16
        ssi: 0  # not in TAXSIM35
        state_supplement: 0  # not in TAXSIM35
        wic: 0  # not in TAXSIM35
        ma_covid_19_essential_employee_premium_pay_program: 0  # not in TAXSIM35
    tax_units:
      tax_unit:
        members: [person1, person2, person3, person4, person5, person6]
        premium_tax_credit: 0  # not in TAXSIM35
        local_income_tax: 0  # not in TAXSIM35
        state_sales_tax: 0  # not in TAXSIM35
        ca_use_tax: 0  # not in TAXSIM35
        il_use_tax: 0  # not in TAXSIM35
        nm_2021_income_rebate: 0  # not in TAXSIM35
        nm_additional_2021_income_rebate: 0  # not in TAXSIM35
        nm_supplemental_2021_income_rebate: 0  # not in TAXSIM35
        ny_supplemental_eitc: 0  # not in TAXSIM35
        ok_use_tax: 0  # not in TAXSIM35
        pa_use_tax: 0  # not in TAXSIM35
        vt_renter_credit: 0  # not in TAXSIM35
    spm_units:
      spm_unit:
        members: [person1, person2, person3, person4, person5, person6]
        snap: 0  # not in TAXSIM35
        tanf: 0  # not in TAXSIM35
    households:
      household:
        members: [person1, person2, person3, person4, person5, person6]
        state_fips: 36  # NY
  output:  # expected results from patched TAXSIM35 2024-02-15 version
    ny_income_tax: -680.80

[PavelMakarchuk]

@hua7450 and @pxu12 could you please take a look at NY and let me know where we start to differ from TAXSIM, I have forwarded you the files via email

[PavelMakarchuk]

@martinholmer I believe what is causing this issue is the misunderstanding of the new York CTC (Empire State child credit)
The credit computation is as follows:
The LARGER of:
100USD * qualifying child
OR
33% of federal CTC amount

I believe that TAXSIM is not taking into consideration that NY is only applying the pre-2017 CTC rules which means that it could never interact with the refundable CTC amount.

In this case TAXSIM projects $1,320 which is 33% of the TOTAL $4,000 CTC amount that the tax unit would be eligible for but what PE does is to take the 33% of just the $823 which the amount that the CTC is actually worth in this case, as this is the pre-credits tax value. Thus we assign $400 as opposed to $1,320

I believe this is the correct way of computing this credit, please let me know if I am misinterpreting something.

Law

[pxu12]

@PavelMakarchuk Hi Pavel, we just filled in the IT-213 form but got a different number than $1320. We are not sure if we got something wrong.

line 6 and 7 come from the following worksheets:
it213i_2021 (2).pdf

[PavelMakarchuk]

Is the amount from Worksheet A line 10 "0"?

…

On Thu, Feb 22, 2024 at 5:23 PM Pinyan ***@***.***> wrote: @PavelMakarchuk <https://github.com/PavelMakarchuk> Hi Pavel, we just filled in the IT-213 form but got a different number than $1320. We are not sure if we got something wrong. 1000032817.png (view on web) <https://github.com/PolicyEngine/policyengine-us/assets/129036923/8d6c9974-133a-4399-85e7-51bb59984d3e> line 6 and 7 come from the following worksheets: it213i_2021 (2).pdf <https://github.com/PolicyEngine/policyengine-us/files/14376476/it213i_2021.2.pdf> — Reply to this email directly, view it on GitHub <#3915 (comment)>, or unsubscribe <https://github.com/notifications/unsubscribe-auth/A2MPGQYSJOOSN3TR5HMVYQTYU5WG5AVCNFSM6AAAAABDNUJLIGVHI2DSMVQWIX3LMV43SRDJONRXK43TNFXW4Q3PNVWWK3TUHM4DKNJZGAYTI> . You are receiving this because you were mentioned.Message ID: <PolicyEngine/policyengine-us/repo-discussions/3915/comments/8559014@ github.com>

[PavelMakarchuk]

Could you add the worksheet a calc Pavel Makarchuk ***@***.***> schrieb am Do. 22. Feb. 2024 um 6:06 PM:

…

Is the amount from Worksheet A line 10 "0"? On Thu, Feb 22, 2024 at 5:23 PM Pinyan ***@***.***> wrote: > @PavelMakarchuk <https://github.com/PavelMakarchuk> Hi Pavel, we just > filled in the IT-213 form but got a different number than $1320. We are not > sure if we got something wrong. > > 1000032817.png (view on web) > <https://github.com/PolicyEngine/policyengine-us/assets/129036923/8d6c9974-133a-4399-85e7-51bb59984d3e> > > line 6 and 7 come from the following worksheets: > it213i_2021 (2).pdf > <https://github.com/PolicyEngine/policyengine-us/files/14376476/it213i_2021.2.pdf> > > — > Reply to this email directly, view it on GitHub > <#3915 (comment)>, > or unsubscribe > <https://github.com/notifications/unsubscribe-auth/A2MPGQYSJOOSN3TR5HMVYQTYU5WG5AVCNFSM6AAAAABDNUJLIGVHI2DSMVQWIX3LMV43SRDJONRXK43TNFXW4Q3PNVWWK3TUHM4DKNJZGAYTI> > . > You are receiving this because you were mentioned.Message ID: > <PolicyEngine/policyengine-us/repo-discussions/3915/comments/8559014@ > github.com> >

[PavelMakarchuk]

What is the question 2 that is needed for step 4?

…

On Thu, Feb 22, 2024 at 6:18 PM hua7450 ***@***.***> wrote: image.png (view on web) <https://github.com/PolicyEngine/policyengine-us/assets/113824411/d470f81d-4485-46b5-ad91-6f6198e8b5bc> It's actually from line 9, it is 0. — Reply to this email directly, view it on GitHub <#3915 (comment)>, or unsubscribe <https://github.com/notifications/unsubscribe-auth/A2MPGQ65ISZVJM7UM432STTYU54XJAVCNFSM6AAAAABDNUJLIGVHI2DSMVQWIX3LMV43SRDJONRXK43TNFXW4Q3PNVWWK3TUHM4DKNJZGY2DK> . You are receiving this because you were mentioned.Message ID: <PolicyEngine/policyengine-us/repo-discussions/3915/comments/8559645@ github.com>

[pxu12]

Question 2 is

[pxu12]

@PavelMakarchuk I figured out what went wrong in our former forms: the amount in Schedule A line 8 should be $0, which makes line 10 $823 instead of $0. The final result for NY Empire State child credit should be $1320 as you suggested.

[PavelMakarchuk]

@hua7450 and @pxu12 could you redo this for the 2020 and 2022 tax forms? Same thing as 2021 - Worksheets A & C + credit computation

[MaxGhenis]

I don't think we need both 2020 and 2022, can skip 2020

[PavelMakarchuk]

Thank you @pxu12 these are the 2022 forms filled out. We get the same amount as in 2021

[MaxGhenis]

That uses the 2022 federal forms too?

[pxu12]

Yes, we used the 2022 federal forms.

[martinholmer]

OK, thanks for all the discussion. Unless I'm missing something, the latest thinking is that the $1320 credit TAXSIM35 generates for this case is correct and the PEUS $400 ny_ctc amount is incorrect. Is that the conclusion others have reached? If so, is there a development branch to fix this in Policyengine-US?

[PavelMakarchuk]

There is the PR #3996 which should address the issue if all the questions for the forms are answered

[MaxGhenis]

Again though are we sure the $100 floor never binds? We may want to confirm the presence of a superfluous policy parameter with the state, or researchers like those at Columbia Center on Poverty and Social Policy, before making that change.

[martinholmer]

This discussion has concluded and has generated issue #3995.

[MaxGhenis]

I've merged #4386, which aligns PE with TAXSIM with respect to the Empire State Child Credit. In both models, the $100 minimum is effectively nullified. I've reopened this discussion to determine whether that's correct. cc @feenberg

[MaxGhenis]

Is this answered? I'm not yet clear.

[martinholmer]

@MaxGhenis said in discussion topic #3915:

Is this answered? I'm not yet clear.

In order to know if this is resolved or not, I guess the state income tax testing program would have to restart.

[feenberg]

I take it there is a disagreement between Taxsim and PEUS. Can you give me the details of the taxpayer? I don't see the income or other items (aside from the CTC worksheet). I can put that into TaxAct and it will guide me on how to fix Taxsim, if that is required. The TaxAct "All States Edition" is really great for getting these interpretations and only costs $150. Did you see the example I sent a few days ago with 4 children and 36,010 income? Daniel Feenberg 617-682-6204

…

On Wed, 14 Aug 2024, Max Ghenis wrote: Reopened #3915. -- Reply to this email directly or view it on GitHub: #3915 You are receiving this because you were mentioned. Message ID: ***@***.***>