Montana itemized deduction (PolicyEngine#3265)

* Montana Itemized Deduction Fixes PolicyEngine#2432 * added legislation * legislation * Fixed mt_itemized_deduction * created miscellaneous deduction umbrella * rename files, adding file * specify legal code section Co-authored-by: Pinyan <[email protected]> * fix references * minor change * make format * rename files and variable names * changelog_entry fix * add "mt_child_dependent_care_expense_deduction" as a source of miscellaneous deductions * fix the test file, mt_child_dependent_care_expense_deduction is not merged yet * add a palceholder file Fixes PolicyEngine#3068 * replace reference link Fixes PolicyEngine#3169 * make format * add mt_medical_expense_deduction Fixes PolicyEngine#3068 * add mt_salt_deduction, adjust code Co-authored-by: Pavel Makarchuk <[email protected]> * Update policyengine_us/variables/gov/states/mt/tax/income/deductions/itemized/mt_salt_deduction.py --------- Co-authored-by: Yinan0409 <[email protected]> Co-authored-by: Pavel Makarchuk <[email protected]> Co-authored-by: Max Ghenis <[email protected]>
SirMalamute · Nov 30, 2023 · 7753cd7 · 7753cd7
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diff --git a/changelog_entry.yaml b/changelog_entry.yaml
@@ -0,0 +1,4 @@
+- bump: minor
+  changes:
+    added:
+    - Montana itemized deductions.
diff --git a/policyengine_us/parameters/gov/states/mt/tax/income/deductions/itemized/misc_deductions.yaml b/policyengine_us/parameters/gov/states/mt/tax/income/deductions/itemized/misc_deductions.yaml
@@ -0,0 +1,20 @@
+description: Montana counts these sources as miscellaneous deductions. 
+values:
+  2021-01-01:
+    - mt_child_dependent_care_expense_deduction  
+    - casualty_loss_deduction  
+
+
+metadata:
+  unit: list
+  label: Montana miscellaneous deductions 
+  period: year
+  reference:
+    - title: Montana Individual Income Tax Return (Form 2) 2022
+      href: https://mtrevenue.gov/wp-content/uploads/dlm_uploads/2023/05/Montana-Idividiual-Income-Tax-Return-Form-2-2022v6.2.pdf#page=7
+    - title: Montana Individual Income Tax Return (Form 2) 2021
+      href: https://mtrevenue.gov/wp-content/uploads/mdocs/form%202%202021.pdf#page=7
+    - title: Montana Tax From Instructions 2021
+      href: https://mtrevenue.gov/wp-content/uploads/dlm_uploads/2022/12/Form-2-2022-Instructions.pdf#page=32
+    - title: MT Code § 15-30-2131 (2022) (1)(a)&(c)
+      href: https://law.justia.com/codes/montana/2022/title-15/chapter-30/part-21/section-15-30-2131/
diff --git a/.../policy/baseline/gov/states/mt/tax/income/deductions/itemized/mt_itemized_deductions.yaml b/.../policy/baseline/gov/states/mt/tax/income/deductions/itemized/mt_itemized_deductions.yaml
@@ -0,0 +1,41 @@
+- name: Test case 1 # filing separate
+  period: 2021
+  input:
+     filing_status: SEPARATE
+     charitable_deduction: 800
+     interest_deduction: 265
+     mt_salt_deduction: 5_000
+     mt_medical_expense_deduction: 1_000
+     casualty_loss_deduction: 400
+     mt_child_dependent_care_expense_deduction: 123
+     state_code: MT
+  output:
+    mt_itemized_deductions: 7_588
+
+- name: Test case 2 #salt has a cap of 10000 for single, head of household and joint
+  period: 2022
+  input:
+     filing_status: HEAD_OF_HOUSEHOLD
+     charitable_deduction: 0
+     interest_deduction: 1_234
+     mt_salt_deduction: 10_000
+     mt_medical_expense_deduction: 3_000 
+     casualty_loss_deduction: 0
+     mt_child_dependent_care_expense_deduction: 0
+     state_code: MT
+  output:
+    mt_itemized_deductions: 14_234
+
+- name: Test case 3 #sum all terms
+  period: 2021
+  input:
+     filing_status: SINGLE
+     charitable_deduction: 1_000
+     interest_deduction: 34
+     mt_salt_deduction: 1_035
+     mt_medical_expense_deduction: 3_000
+     casualty_loss_deduction: 745
+     mt_child_dependent_care_expense_deduction: 1_004
+     state_code: MT
+  output:
+    mt_itemized_deductions: 6_818
diff --git a/...y/baseline/gov/states/mt/tax/income/deductions/itemized/mt_medical_expense_deduction.yaml b/...y/baseline/gov/states/mt/tax/income/deductions/itemized/mt_medical_expense_deduction.yaml
@@ -0,0 +1,18 @@
+- name: Test case 1, medical_expense higher than 0.075 of agi.
+  period: 2021
+  input:
+     medical_expense: 1_000
+     mt_agi: 10_000
+     state_code: MT
+  output:
+     mt_medical_expense_deduction: 250
+
+- name: Test case 21, medical_expense less than 0.075 of agi.
+  period: 2021
+  input:
+     medical_expense: 1_000
+     mt_agi: 20_000
+     state_code: MT
+  output:
+     mt_medical_expense_deduction: 0
+
diff --git a/...tests/policy/baseline/gov/states/mt/tax/income/deductions/itemized/mt_salt_deduction.yaml b/...tests/policy/baseline/gov/states/mt/tax/income/deductions/itemized/mt_salt_deduction.yaml
@@ -0,0 +1,37 @@
+- name: Test case 1, filing separate, higher than cap
+  period: 2021
+  input:
+     filing_status: SEPARATE
+     real_estate_taxes: 6_000
+     state_code: MT
+  output:
+     mt_salt_deduction: 5_000
+
+- name: Test case 2, filing single, less than cap
+  period: 2021
+  input:
+     filing_status: SINGLE
+     real_estate_taxes: 3_000
+     state_code: MT
+  output:
+     mt_salt_deduction: 3_000
+
+
+- name: Test case 3, filing jointly, lower than cap
+  period: 2021
+  input:
+     filing_status: JOINT
+     real_estate_taxes: 6_000
+     state_code: MT
+  output:
+     mt_salt_deduction: 6_000
+
+- name: Test case 4, filing jointly, higher than cap
+  period: 2021
+  input:
+     filing_status: JOINT
+     real_estate_taxes: 11_000
+     state_code: MT
+  output:
+     mt_salt_deduction: 10_000
+
diff --git a/...les/gov/states/mt/tax/income/deductions/cdcc/mt_child_dependent_care_expense_deduction.py b/...les/gov/states/mt/tax/income/deductions/cdcc/mt_child_dependent_care_expense_deduction.py
@@ -0,0 +1,10 @@
+from policyengine_us.model_api import *
+
+
+class mt_child_dependent_care_expense_deduction(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "Montana child dependent care expense deduction"
+    unit = USD
+    definition_period = YEAR
+    defined_for = StateCode.MT
diff --git a/...ngine_us/variables/gov/states/mt/tax/income/deductions/itemized/mt_itemized_deductions.py b/...ngine_us/variables/gov/states/mt/tax/income/deductions/itemized/mt_itemized_deductions.py
@@ -0,0 +1,38 @@
+from policyengine_us.model_api import *
+
+
+class mt_itemized_deductions(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "Montana itemized deductions"
+    unit = USD
+    definition_period = YEAR
+    reference = (
+        "https://mtrevenue.gov/wp-content/uploads/dlm_uploads/2023/05/Montana-Idividiual-Income-Tax-Return-Form-2-2022v6.2.pdf#page=7"
+        "https://law.justia.com/codes/montana/2022/title-15/chapter-30/part-21/section-15-30-2131/"
+        # MT Code § 15-30-2131 (2022) (1)
+    )
+    defined_for = StateCode.MT
+
+    def formula(tax_unit, period, parameters):
+        p = parameters(period).gov.irs.deductions
+        itm_deds = [
+            deduction
+            for deduction in p.itemized_deductions
+            if deduction
+            not in [
+                "salt_deduction",
+                "casualty_loss_deduction",
+                "medical_expense_deduction",
+            ]
+        ]
+        return add(
+            tax_unit,
+            period,
+            itm_deds
+            + [
+                "mt_misc_deductions",
+                "mt_medical_expense_deduction",
+                "mt_salt_deduction",
+            ],
+        )
diff --git a/...us/variables/gov/states/mt/tax/income/deductions/itemized/mt_medical_expense_deduction.py b/...us/variables/gov/states/mt/tax/income/deductions/itemized/mt_medical_expense_deduction.py
@@ -0,0 +1,23 @@
+from policyengine_us.model_api import *
+
+
+class mt_medical_expense_deduction(Variable):
+    value_type = float
+    entity = TaxUnit
+    definition_period = YEAR
+    label = "Montana medical expense deduction"
+    reference = (
+        "https://mtrevenue.gov/wp-content/uploads/dlm_uploads/2023/05/Montana-Idividiual-Income-Tax-Return-Form-2-2022v6.2.pdf#page=7",
+        "https://law.justia.com/codes/montana/2022/title-15/chapter-30/part-21/section-15-30-2131/"
+        # MT Code § 15-30-2131 (2022) (1)(g)(i)
+    )
+    unit = USD
+    defined_for = StateCode.MT
+
+    def formula(tax_unit, period, parameters):
+        expense = add(tax_unit, period, ["medical_expense"])
+        medical = parameters(period).gov.irs.deductions.itemized.medical
+        # Law does not define Montana AGI as the cap.
+        # Tax form points to page 1, line 14, which is Montana AGI.
+        medical_floor = medical.floor * tax_unit("mt_agi", period)
+        return max_(0, expense - medical_floor)
diff --git a/policyengine_us/variables/gov/states/mt/tax/income/deductions/itemized/mt_misc_deductions.py b/policyengine_us/variables/gov/states/mt/tax/income/deductions/itemized/mt_misc_deductions.py
@@ -0,0 +1,17 @@
+from policyengine_us.model_api import *
+
+
+class mt_misc_deductions(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "Montana miscellaneous deductions"
+    unit = USD
+    definition_period = YEAR
+    reference = (
+        "https://mtrevenue.gov/wp-content/uploads/dlm_uploads/2023/05/Montana-Idividiual-Income-Tax-Return-Form-2-2022v6.2.pdf#page=7"
+        "https://law.justia.com/codes/montana/2022/title-15/chapter-30/part-21/section-15-30-2131/"
+        # Montana Code Annotated MT Code § 15-30-2131 (2022) (1)(a)&(c)
+    )
+    defined_for = StateCode.MT
+
+    adds = "gov.states.mt.tax.income.deductions.itemized.misc_deductions"
diff --git a/policyengine_us/variables/gov/states/mt/tax/income/deductions/itemized/mt_salt_deduction.py b/policyengine_us/variables/gov/states/mt/tax/income/deductions/itemized/mt_salt_deduction.py
@@ -0,0 +1,24 @@
+from policyengine_us.model_api import *
+
+
+class mt_salt_deduction(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "Montana state and local tax deduction"
+    unit = USD
+    definition_period = YEAR
+    reference = (
+        "https://mtrevenue.gov/wp-content/uploads/dlm_uploads/2023/05/Montana-Idividiual-Income-Tax-Return-Form-2-2022v6.2.pdf#page=7"
+        "https://law.justia.com/codes/montana/2022/title-15/chapter-30/part-21/section-15-30-2131/"
+        # Montana Code Annotated MT Code § 15-30-2131 (2022) (1)(a)
+    )
+    defined_for = StateCode.MT
+
+    def formula(tax_unit, period, parameters):
+        p = parameters(period).gov.irs.deductions
+        filing_status = tax_unit("filing_status", period)
+        real_estate_tax = add(tax_unit, period, ["real_estate_taxes"])
+        return min_(
+            real_estate_tax,
+            p.itemized.salt_and_real_estate.cap[filing_status],
+        )