diff --git a/changelog.d/vt-cdcc-fixes.fixed.md b/changelog.d/vt-cdcc-fixes.fixed.md new file mode 100644 index 00000000000..0a638236458 --- /dev/null +++ b/changelog.d/vt-cdcc-fixes.fixed.md @@ -0,0 +1 @@ +Apply Vermont's 2022 low-income AGI cap to the child and dependent care credit, end the 50 percent low-income credit after 2021, add the pre-2022 24 percent nonrefundable credit under 32 V.S.A. 5822(d)(1), and correct the state CDCC registry. diff --git a/policyengine_us/parameters/gov/states/household/state_cdccs.yaml b/policyengine_us/parameters/gov/states/household/state_cdccs.yaml index 4408e509a49..de9756f4edc 100644 --- a/policyengine_us/parameters/gov/states/household/state_cdccs.yaml +++ b/policyengine_us/parameters/gov/states/household/state_cdccs.yaml @@ -29,6 +29,7 @@ values: - me_child_care_credit - ny_cdcc - vt_low_income_cdcc + - vt_nonrefundable_cdcc 2006-01-01: - ca_cdcc - co_cdcc @@ -39,6 +40,7 @@ values: - me_child_care_credit - ny_cdcc - vt_low_income_cdcc + - vt_nonrefundable_cdcc 2013-01-01: - ar_cdcc - ca_cdcc @@ -50,6 +52,7 @@ values: - me_child_care_credit - ny_cdcc - vt_low_income_cdcc + - vt_nonrefundable_cdcc 2018-01-01: - ar_cdcc - ca_cdcc @@ -65,6 +68,7 @@ values: - me_child_care_credit - ny_cdcc - vt_low_income_cdcc + - vt_nonrefundable_cdcc 2019-01-01: - ar_cdcc - ca_cdcc @@ -82,6 +86,7 @@ values: - me_child_care_credit - ny_cdcc - vt_low_income_cdcc + - vt_nonrefundable_cdcc 2020-01-01: - ar_cdcc - ca_cdcc @@ -100,6 +105,7 @@ values: - ny_cdcc - sc_cdcc - vt_low_income_cdcc + - vt_nonrefundable_cdcc 2021-01-01: - ar_cdcc - ca_cdcc @@ -129,6 +135,7 @@ values: - ri_cdcc - sc_cdcc - vt_low_income_cdcc + - vt_nonrefundable_cdcc 2022-01-01: - ar_cdcc - ca_cdcc @@ -159,7 +166,6 @@ values: - ri_cdcc - sc_cdcc - vt_cdcc - - vt_low_income_cdcc - wi_childcare_expense_credit 2023-01-01: - ar_cdcc @@ -193,7 +199,6 @@ values: - ri_cdcc - sc_cdcc - vt_cdcc - - vt_low_income_cdcc - wi_childcare_expense_credit 2024-01-01: - ar_cdcc @@ -227,7 +232,6 @@ values: - ri_cdcc - sc_cdcc - vt_cdcc - - vt_low_income_cdcc - wi_childcare_expense_credit - wv_cdcc diff --git a/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/income_limit_in_effect.yaml b/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/income_limit_in_effect.yaml new file mode 100644 index 00000000000..c08001b4c7b --- /dev/null +++ b/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/income_limit_in_effect.yaml @@ -0,0 +1,15 @@ +description: Vermont limits the Child and Dependent Care Credit to filers with adjusted gross income at or below the low-income threshold when this is in effect. +values: + # 2022 Act 138, Sec. 3 retained the 5828c low-income adjusted gross income + # cap for 2022; 2023 Act 72, Sec. 14 removed it effective 2023. + 2022-01-01: true + 2023-01-01: false +metadata: + unit: bool + period: year + label: Vermont CDCC income limit in effect + reference: + - title: 2022 Act 138, Sec. 3 (amending 32 V.S.A. § 5828c) + href: https://legislature.vermont.gov/Documents/2022/Docs/ACTS/ACT138/ACT138%20As%20Enacted.pdf#page=3 + - title: 2023 Act 72, Sec. 14 (amending 32 V.S.A. § 5828c) + href: https://legislature.vermont.gov/Documents/2024/Docs/ACTS/ACT072/ACT072%20As%20Enacted.pdf#page=14 diff --git a/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/low_income/rate.yaml b/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/low_income/rate.yaml index d8597784984..1514e89defe 100644 --- a/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/low_income/rate.yaml +++ b/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/low_income/rate.yaml @@ -1,15 +1,21 @@ -description: Vermont matches this percent of the federal Child and Dependent Care Credit for low-income filers. +description: Vermont matches this percent of the federal Child and Dependent Care Credit for low-income filers. values: 2005-01-01: 0.5 + # 2022 Act 138, Sec. 3 replaced the 50 percent low-income credit with the + # 72 percent credit in 32 V.S.A. § 5828c effective 2022. + 2022-01-01: 0 metadata: unit: /1 + period: year label: Vermont low-income CDCC match reference: + - title: 2022 Act 138, Sec. 3 (amending 32 V.S.A. § 5828c) + href: https://legislature.vermont.gov/Documents/2022/Docs/ACTS/ACT138/ACT138%20As%20Enacted.pdf#page=3 - title: 2021 Form IN-112 Vermont Tax Adjustments and Credits href: https://tax.vermont.gov/sites/tax/files/documents/IN-112-2021.pdf#page=2 - title: 2021 Vermont Statutes, Title 32 - Taxation and Finance, Chapter 151 - Income Taxes, §5828c. Low-income child and dependent care credit href: https://law.justia.com/codes/vermont/2021/title-32/chapter-151/section-5828c/ - title: 2020 Form IN-112 Vermont Tax Adjustments and Credits - href: https://tax.vermont.gov/sites/tax/files/documents/IN-112-2020.pdf#page=2# + href: https://tax.vermont.gov/sites/tax/files/documents/IN-112-2020.pdf#page=2 - title: 2020 Vermont Statutes, Title 32 - Taxation and Finance, Chapter 151 - Income Taxes, §5828c. Low-income child and dependent care credit href: https://law.justia.com/codes/vermont/2020/title-32/chapter-151/section-5828c/ diff --git a/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/nonrefundable/rate.yaml b/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/nonrefundable/rate.yaml new file mode 100644 index 00000000000..b4a1248df4d --- /dev/null +++ b/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/nonrefundable/rate.yaml @@ -0,0 +1,20 @@ +description: Vermont matches this fraction of the federal Child and Dependent Care Credit under its nonrefundable credit. +values: + # Verified for 2021 via the pre-amendment text struck by 2022 Act 138, + # Sec. 2; assumed unchanged back to 2005, matching the low-income credit + # parameters. + 2005-01-01: 0.24 + # 2022 Act 138, Sec. 2 struck child and dependent care credits from the + # 32 V.S.A. § 5822(d)(1) match effective 2022. + 2022-01-01: 0 +metadata: + unit: /1 + period: year + label: Vermont nonrefundable CDCC match + reference: + - title: 2021 Vermont Statutes, Title 32 - Taxation and Finance, Chapter 151 - Income Taxes, §5822(d)(1) + href: https://law.justia.com/codes/vermont/2021/title-32/chapter-151/section-5822/ + - title: 2022 Act 138, Sec. 2 (amending 32 V.S.A. § 5822(d)) + href: https://legislature.vermont.gov/Documents/2022/Docs/ACTS/ACT138/ACT138%20As%20Enacted.pdf#page=2 + - title: 2021 Schedule IN-112, Part II + href: https://tax.vermont.gov/sites/tax/files/documents/IN-112-2021.pdf#page=2 diff --git a/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/rate.yaml b/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/rate.yaml index fcd21cbe174..610f1309a4b 100644 --- a/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/rate.yaml +++ b/policyengine_us/parameters/gov/states/vt/tax/income/credits/cdcc/rate.yaml @@ -1,10 +1,17 @@ -description: Vermont matches this percent of the federal Child and Dependent Care Credit. +description: Vermont matches this percent of the federal Child and Dependent Care Credit. values: + # 2022 Act 138, Sec. 3 raised the 5828c match from 50 to 72 percent + # effective 2022; before then only the 50 percent low-income credit and + # the 24 percent nonrefundable credit applied. + 2021-01-01: 0 2022-01-01: 0.72 metadata: unit: /1 + period: year label: Vermont CDCC match reference: + - title: 2022 Act 138, Sec. 3 (amending 32 V.S.A. § 5828c) + href: https://legislature.vermont.gov/Documents/2022/Docs/ACTS/ACT138/ACT138%20As%20Enacted.pdf#page=3 - title: 2022 Form IN-112 Vermont Tax Adjustments and Credits href: https://tax.vermont.gov/sites/tax/files/documents/IN-112-2022.pdf#page=2 - title: 2022 Vermont Statutes, Title 32 - Taxation and Finance, Chapter 151 - Income Taxes, §5828c. Child and dependent care credit diff --git a/policyengine_us/parameters/gov/states/vt/tax/income/credits/non_refundable.yaml b/policyengine_us/parameters/gov/states/vt/tax/income/credits/non_refundable.yaml index 28aef5c93f3..cf08b92a6a8 100644 --- a/policyengine_us/parameters/gov/states/vt/tax/income/credits/non_refundable.yaml +++ b/policyengine_us/parameters/gov/states/vt/tax/income/credits/non_refundable.yaml @@ -3,12 +3,20 @@ values: 2021-01-01: - vt_charitable_contribution_credit - vt_529_plan_credit + - vt_nonrefundable_cdcc + # 2022 Act 138, Sec. 2 struck child and dependent care credits from the + # 32 V.S.A. § 5822(d)(1) match effective 2022. + 2022-01-01: + - vt_charitable_contribution_credit + - vt_529_plan_credit metadata: unit: list label: Vermont non-refundable tax credits reference: - title: Vermont Statutes Title 32 - Taxation and Finance § 5822-(d)-3 href: https://law.justia.com/codes/vermont/2022/title-32/chapter-151/section-5822/ + - title: 2022 Act 138, Sec. 2 (amending 32 V.S.A. § 5822(d)) + href: https://legislature.vermont.gov/Documents/2022/Docs/ACTS/ACT138/ACT138%20As%20Enacted.pdf#page=2 - title: 2021 Vermont Income Tax Return Form Line 11-13 href: https://tax.vermont.gov/sites/tax/files/documents/IN-111-2021.pdf#page=1 - title: 2022 Vermont Income Tax Return Form Line 11-13 diff --git a/policyengine_us/tests/policy/baseline/gov/states/vt/tax/income/credits/cdcc/vt_cdcc.yaml b/policyengine_us/tests/policy/baseline/gov/states/vt/tax/income/credits/cdcc/vt_cdcc.yaml index fc525b6e557..9a7a5c687df 100644 --- a/policyengine_us/tests/policy/baseline/gov/states/vt/tax/income/credits/cdcc/vt_cdcc.yaml +++ b/policyengine_us/tests/policy/baseline/gov/states/vt/tax/income/credits/cdcc/vt_cdcc.yaml @@ -13,3 +13,31 @@ state_code: VT output: vt_cdcc: 1440 + +- name: Vermont CDCC 2022 above the low-income AGI cap gets no credit, 2022 Act 138 Sec. 3 + period: 2022 + input: + capped_cdcc: 1_000 + adjusted_gross_income: 50_000 + state_code: VT + output: + vt_cdcc: 0 + +- name: Vermont CDCC 2022 joint filer at the 40,000 AGI threshold keeps the credit + period: 2022 + input: + capped_cdcc: 1_000 + adjusted_gross_income: 40_000 + filing_status: JOINT + state_code: VT + output: + vt_cdcc: 720 + +- name: Vermont CDCC 2023 has no AGI cap, 2023 Act 72 Sec. 14 + period: 2023 + input: + capped_cdcc: 1_000 + adjusted_gross_income: 50_000 + state_code: VT + output: + vt_cdcc: 720 diff --git a/policyengine_us/tests/policy/baseline/gov/states/vt/tax/income/credits/cdcc/vt_low_income_cdcc.yaml b/policyengine_us/tests/policy/baseline/gov/states/vt/tax/income/credits/cdcc/vt_low_income_cdcc.yaml index 13e7850f5f9..1903ced9a63 100644 --- a/policyengine_us/tests/policy/baseline/gov/states/vt/tax/income/credits/cdcc/vt_low_income_cdcc.yaml +++ b/policyengine_us/tests/policy/baseline/gov/states/vt/tax/income/credits/cdcc/vt_low_income_cdcc.yaml @@ -24,3 +24,12 @@ vt_low_income_cdcc_eligible: true output: vt_low_income_cdcc: 500 + +- name: Vermont low-income CDCC ends after 2021, replaced by the 72 percent credit + period: 2022 + input: + state_code: VT + capped_cdcc: 1_000 + vt_low_income_cdcc_eligible: true + output: + vt_low_income_cdcc: 0 diff --git a/policyengine_us/tests/policy/baseline/gov/states/vt/tax/income/credits/cdcc/vt_nonrefundable_cdcc.yaml b/policyengine_us/tests/policy/baseline/gov/states/vt/tax/income/credits/cdcc/vt_nonrefundable_cdcc.yaml new file mode 100644 index 00000000000..9d3ba433591 --- /dev/null +++ b/policyengine_us/tests/policy/baseline/gov/states/vt/tax/income/credits/cdcc/vt_nonrefundable_cdcc.yaml @@ -0,0 +1,28 @@ +- name: Vermont 2021 nonrefundable CDCC is 24 percent of the federal credit above the low-income threshold + period: 2021 + input: + capped_cdcc: 1_000 + adjusted_gross_income: 50_000 + state_code: VT + output: + vt_nonrefundable_cdcc: 240 # 1,000 * 0.24 + vt_non_refundable_credits: 240 + +- name: Vermont 2021 low-income filer takes the 5828c credit in lieu of the nonrefundable credit + period: 2021 + input: + capped_cdcc: 1_000 + adjusted_gross_income: 20_000 + state_code: VT + output: + vt_low_income_cdcc: 500 # 1,000 * 0.5 + vt_nonrefundable_cdcc: 0 + +- name: Vermont nonrefundable CDCC ends after 2021, 2022 Act 138 Sec. 2 + period: 2022 + input: + capped_cdcc: 1_000 + adjusted_gross_income: 50_000 + state_code: VT + output: + vt_nonrefundable_cdcc: 0 diff --git a/policyengine_us/variables/gov/states/vt/tax/income/credits/cdcc/vt_cdcc.py b/policyengine_us/variables/gov/states/vt/tax/income/credits/cdcc/vt_cdcc.py index 3092b98f137..aa0e966e853 100644 --- a/policyengine_us/variables/gov/states/vt/tax/income/credits/cdcc/vt_cdcc.py +++ b/policyengine_us/variables/gov/states/vt/tax/income/credits/cdcc/vt_cdcc.py @@ -8,9 +8,10 @@ class vt_cdcc(Variable): unit = USD definition_period = YEAR reference = ( - "https://tax.vermont.gov/sites/tax/files/documents/IN-112-2022.pdf#page=2" - "https://law.justia.com/codes/vermont/2022/title-32/chapter-151/section-5828c/" - "https://www.irs.gov/pub/irs-prior/f2441--2022.pdf#page=1" + "https://legislature.vermont.gov/statutes/section/32/151/05828c", + "https://legislature.vermont.gov/Documents/2022/Docs/ACTS/ACT138/ACT138%20As%20Enacted.pdf#page=3", + "https://legislature.vermont.gov/Documents/2024/Docs/ACTS/ACT072/ACT072%20As%20Enacted.pdf#page=14", + "https://tax.vermont.gov/sites/tax/files/documents/IN-112-2022.pdf#page=2", ) defined_for = StateCode.VT @@ -18,4 +19,11 @@ def formula(tax_unit, period, parameters): p = parameters(period).gov.states.vt.tax.income.credits.cdcc # The form refers to 2022 Form 2441 line 11, which caps the credit at tax liability. federal_cdcc = tax_unit("capped_cdcc", period) + # 2022 Act 138 raised the 5828c match to 72 percent but retained the + # low-income adjusted gross income cap and the certified-facility + # requirement for 2022; 2023 Act 72 removed them effective 2023. We + # do not track facility certification or in-state care at the moment. + if p.income_limit_in_effect: + income_eligible = tax_unit("vt_low_income_cdcc_eligible", period) + return income_eligible * federal_cdcc * p.rate return federal_cdcc * p.rate diff --git a/policyengine_us/variables/gov/states/vt/tax/income/credits/cdcc/vt_nonrefundable_cdcc.py b/policyengine_us/variables/gov/states/vt/tax/income/credits/cdcc/vt_nonrefundable_cdcc.py new file mode 100644 index 00000000000..e7a1cf68945 --- /dev/null +++ b/policyengine_us/variables/gov/states/vt/tax/income/credits/cdcc/vt_nonrefundable_cdcc.py @@ -0,0 +1,26 @@ +from policyengine_us.model_api import * + + +class vt_nonrefundable_cdcc(Variable): + value_type = float + entity = TaxUnit + label = "Vermont nonrefundable child and dependent care credit" + unit = USD + definition_period = YEAR + reference = ( + "https://law.justia.com/codes/vermont/2021/title-32/chapter-151/section-5822/", + "https://legislature.vermont.gov/Documents/2022/Docs/ACTS/ACT138/ACT138%20As%20Enacted.pdf#page=2", + ) + defined_for = StateCode.VT + + def formula(tax_unit, period, parameters): + p = parameters(period).gov.states.vt.tax.income.credits.cdcc + federal_cdcc = tax_unit("capped_cdcc", period) + # 32 V.S.A. § 5822(d)(1) matched 24 percent of the federal credit + # through 2021; 2022 Act 138 struck the child and dependent care + # leg. The § 5828c low-income credit is claimed in lieu of this + # credit, and a low-income filer always prefers its larger + # refundable match, so income-eligible filers are excluded. We + # assume care at a facility qualifying for the § 5828c credit. + low_income_eligible = tax_unit("vt_low_income_cdcc_eligible", period) + return ~low_income_eligible * federal_cdcc * p.nonrefundable.rate