Merge pull request #2781 from martinholmer/fix-cares-charity-deduction

Fix CARES charity deduction for nonitemizers
PSLmodels · Jul 26, 2024 · b41af53 · b41af53
2 parents 1d21162 + 51f3cb9
commit b41af53
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diff --git a/extend_tcja.py b/extend_tcja.py
@@ -58,7 +58,7 @@
     "STD": {"indexed": True, "category": 4},
     # category 5 ...
     "ID_AllTaxes_c": {"indexed": False, "category": 5},
-    "ID_Charity_crt_all": {"indexed": False, "category": 5},
+    "ID_Charity_crt_cash": {"indexed": False, "category": 5},
     "ID_Casualty_hc": {"indexed": False, "category": 5},
     "ID_Miscellaneous_hc": {"indexed": False, "category": 5},
     "ID_ps": {"indexed": True, "category": 5},

diff --git a/taxcalc/calcfunctions.py b/taxcalc/calcfunctions.py
@@ -781,7 +781,7 @@ def ItemDedCap(e17500, e18400, e18500, e19200, e19800, e20100, e20400, g20500,
     e19800: float
         Itemizable charitable giving: cash/check contributions
     e20100: float
-        Itemizable charitalb giving: other than cash/check contributions
+        Itemizable charitable giving: other than cash/check contributions
     e20400: float
         Itemizable gross (before 10% AGI disregard) casualty or theft loss
     g20500: float
@@ -887,7 +887,7 @@ def ItemDed(e17500_capped, e18400_capped, e18500_capped, e19200_capped,
             c17000, c18300, c19200, c19700, c20500, c20800,
             ID_ps, ID_Medical_frt, ID_Medical_frt_add4aged, ID_Medical_hc,
             ID_Casualty_frt, ID_Casualty_hc, ID_Miscellaneous_frt,
-            ID_Miscellaneous_hc, ID_Charity_crt_all, ID_Charity_crt_noncash,
+            ID_Miscellaneous_hc, ID_Charity_crt_cash, ID_Charity_crt_noncash,
             ID_prt, ID_crt, ID_c, ID_StateLocalTax_hc, ID_Charity_frt,
             ID_Charity_hc, ID_InterestPaid_hc, ID_RealEstate_hc,
             ID_Medical_c, ID_StateLocalTax_c, ID_RealEstate_c,
@@ -957,8 +957,8 @@ def ItemDed(e17500_capped, e18400_capped, e18500_capped, e19200_capped,
         Floor (as decimal fraction of AGI) for deductible miscellaneous expenses
     ID_Miscellaneous_hc: float
         Miscellaneous expense deduction haircut
-    ID_Charity_crt_all: float
-        Ceiling (as decimal fraction of AGI) for all charitable contribution deductions
+    ID_Charity_crt_cash: float
+        Ceiling (as decimal fraction of AGI) for cash charitable contribution deductions
     ID_Charity_crt_noncash: float
         Ceiling (as decimal fraction of AGI) for noncash charitable contribution deductions
     ID_prt: float
@@ -1047,8 +1047,9 @@ def ItemDed(e17500_capped, e18400_capped, e18500_capped, e19200_capped,
     c19200 = e19200_capped * (1. - ID_InterestPaid_hc)
     c19200 = min(c19200, ID_InterestPaid_c[MARS - 1])
     # Charity
-    lim30 = min(ID_Charity_crt_noncash * posagi, e20100_capped)
-    c19700 = min(ID_Charity_crt_all * posagi, lim30 + e19800_capped)
+    charity_ded_cash = min(ID_Charity_crt_cash * posagi, e19800_capped)
+    charity_ded_noncash = min(ID_Charity_crt_noncash * posagi, e20100_capped)
+    c19700 = charity_ded_cash + charity_ded_noncash
     # charity floor is zero in present law
     charity_floor = max(ID_Charity_frt * posagi, ID_Charity_f[MARS - 1])
     c19700 = max(0., c19700 - charity_floor) * (1. - ID_Charity_hc)
@@ -1133,9 +1134,9 @@ def AdditionalMedicareTax(e00200, MARS,
 
 @iterate_jit(nopython=True)
 def StdDed(DSI, earned, STD, age_head, age_spouse, STD_Aged, STD_Dep,
-           MARS, MIDR, blind_head, blind_spouse, standard, c19700,
-           STD_allow_charity_ded_nonitemizers,
-           STD_charity_ded_nonitemizers_max):
+           MARS, MIDR, blind_head, blind_spouse, standard,
+           STD_allow_charity_ded_nonitemizers, e19800, ID_Charity_crt_cash,
+           c00100, STD_charity_ded_nonitemizers_max):
     """
     Calculates standard deduction, including standard deduction for
     dependents, aged and bind.
@@ -1166,12 +1167,16 @@ def StdDed(DSI, earned, STD, age_head, age_spouse, STD_Aged, STD_Dep,
         1 if spouse is blind, 0 otherwise
     standard: float
         Standard deduction (zero for itemizers)
-    c19700: float
-        Schedule A: charity contributions deducted
     STD_allow_charity_ded_nonitemizers: bool
         Allow standard deduction filers to take the charitable contributions deduction
+    e19800: float
+        Schedule A: cash charitable contributions
+    ID_Charity_crt_cash: float
+        Fraction of AGI cap on cash charitable deductions
+    c00100: float
+        Federal AGI
     STD_charity_ded_nonitemizers_max: float
-        Ceiling amount (in dollars) for charitable deductions for non-itemizers
+        Ceiling amount (in dollars) for charitable deductions for nonitemizers
 
     Returns
     -------
@@ -1199,8 +1204,10 @@ def StdDed(DSI, earned, STD, age_head, age_spouse, STD_Aged, STD_Dep,
     standard = basic_stded + extra_stded
     if MARS == 3 and MIDR == 1:
         standard = 0.
+    # calculate CARES cash charity deduction for nonitemizers
     if STD_allow_charity_ded_nonitemizers:
-        standard += min(c19700, STD_charity_ded_nonitemizers_max)
+        capped_ded = min(e19800, ID_Charity_crt_cash * c00100)
+        standard += min(capped_ded, STD_charity_ded_nonitemizers_max[MARS - 1])
     return standard
 
 

diff --git a/taxcalc/policy_current_law.json b/taxcalc/policy_current_law.json
@@ -2505,7 +2505,7 @@
     },
     "STD_allow_charity_ded_nonitemizers": {
         "title": "Allow standard deduction filers to take the charitable contributions deduction",
-        "description": "Extends the charitable contributions deduction to taxpayers who take the standard deduction. The same ceilings, floor, and haircuts applied to itemized deduction for charitable contributions also apply here as well as a max on the dollar amount for total charitable deductions for those taking the standard deduction.",
+        "description": "Extends the charitable contributions deduction to taxpayers who take the standard deduction and make cash donations.  The same percent-of-AGI cap applied to itemized deduction for charitable contributions also apply here, as well as a max on the dollar amount for cash charitable deductions for those taking the standard deduction.",
         "notes": "",
         "section_1": "",
         "section_2": "",
@@ -2517,13 +2517,13 @@
                 "year": 2013,
                 "value": false
             },
-            {
-                "year": 2021,
-                "value": false
-            },
             {
                 "year": 2020,
                 "value": true
+            },
+            {
+                "year": 2022,
+                "value": false
             }
         ],
         "validators": {
@@ -2538,8 +2538,8 @@
         }
     },
     "STD_charity_ded_nonitemizers_max": {
-        "title": "Ceiling amount (in dollars) for charitable deductions for non-itemizers",
-        "description": "Puts a ceiling on the dollar of amount of charitable contributions deductions for taxpayers who take the standard deduction.",
+        "title": "Ceiling amount (in dollars) for cash charitable deductions for nonitemizers",
+        "description": "Puts a ceiling on the dollar of amount of cash charitable contributions deductions for taxpayers who take the standard deduction.",
         "notes": "",
         "section_1": "",
         "section_2": "",
@@ -2549,15 +2549,78 @@
         "value": [
             {
                 "year": 2013,
+                "MARS": "single",
                 "value": 0.0
             },
             {
-                "year": 2021,
+                "year": 2013,
+                "MARS": "mjoint",
+                "value": 0.0
+            },
+            {
+                "year": 2013,
+                "MARS": "mseparate",
+                "value": 0.0
+            },
+            {
+                "year": 2013,
+                "MARS": "headhh",
+                "value": 0.0
+            },
+            {
+                "year": 2013,
+                "MARS": "widow",
                 "value": 0.0
             },
             {
                 "year": 2020,
+                "MARS": "single",
+                "value": 300.0
+            },
+            {
+                "year": 2020,
+                "MARS": "mjoint",
+                "value": 600.0
+            },
+            {
+                "year": 2020,
+                "MARS": "mseparate",
+                "value": 300.0
+            },
+            {
+                "year": 2020,
+                "MARS": "headhh",
+                "value": 300.0
+            },
+            {
+                "year": 2020,
+                "MARS": "widow",
                 "value": 300.0
+            },
+            {
+                "year": 2022,
+                "MARS": "single",
+                "value": 0.0
+            },
+            {
+                "year": 2022,
+                "MARS": "mjoint",
+                "value": 0.0
+            },
+            {
+                "year": 2022,
+                "MARS": "mseparate",
+                "value": 0.0
+            },
+            {
+                "year": 2022,
+                "MARS": "headhh",
+                "value": 0.0
+            },
+            {
+                "year": 2022,
+                "MARS": "widow",
+                "value": 0.0
             }
         ],
         "validators": {
@@ -5168,9 +5231,9 @@
             "cps": true
         }
     },
-    "ID_Charity_crt_all": {
-        "title": "Ceiling (as a decimal fraction of AGI) for all charitable contribution deductions",
-        "description": "The total deduction for charity is capped at this fraction of AGI.",
+    "ID_Charity_crt_cash": {
+        "title": "Ceiling (as a decimal fraction of AGI) for cash charitable contribution deductions",
+        "description": "The cash deduction for charity is capped at this fraction of AGI.",
         "notes": "When using PUF data, raising this parameter value may produce unexpected results because in PUF data the variables e19800 and e20100 are already capped.",
         "section_1": "Itemized Deductions",
         "section_2": "Charity",
@@ -5182,36 +5245,16 @@
                 "year": 2013,
                 "value": 0.5
             },
-            {
-                "year": 2014,
-                "value": 0.5
-            },
-            {
-                "year": 2015,
-                "value": 0.5
-            },
-            {
-                "year": 2016,
-                "value": 0.5
-            },
-            {
-                "year": 2017,
-                "value": 0.5
-            },
             {
                 "year": 2018,
                 "value": 0.6
             },
-            {
-                "year": 2019,
-                "value": 0.6
-            },
             {
                 "year": 2020,
                 "value": 1.0
             },
             {
-                "year": 2021,
+                "year": 2022,
                 "value": 0.6
             },
             {

diff --git a/taxcalc/reforms/2017_law.json b/taxcalc/reforms/2017_law.json
@@ -75,7 +75,7 @@
     "ALD_DomesticProduction_hc": {"2018": 0},
     "ID_prt": {"2018": 0.03},
     "ID_crt": {"2018": 0.80},
-    "ID_Charity_crt_all": {"2018": 0.5},
+    "ID_Charity_crt_cash": {"2018": 0.5},
     "ID_Casualty_hc": {"2018": 0},
     "ID_AllTaxes_c": {"2018": [9e99, 9e99, 9e99, 9e99, 9e99]},
     "ID_Miscellaneous_hc": {"2018": 0},

diff --git a/taxcalc/reforms/CARES.json b/taxcalc/reforms/CARES.json
@@ -8,14 +8,17 @@
 // - Limit charitable deductions for non-itemizers to $300 (3)
 // - Provide recovery rebate credits of $1200 per adult and $500 per child (4)
 // Reform_Parameter_Map:
-// - 1: ID_Charity_crt_all
+// - 1: ID_Charity_crt_cash
 // - 2: STD_allow_charity_ded_nonitemizers
 // - 3: STD_charity_ded_nonitemizers_max
 // - 4: RRC_*
 {
-    "ID_Charity_crt_all": {"2020": 1.0, "2021": 0.6},
-    "STD_allow_charity_ded_nonitemizers": {"2020": true, "2021": false},
-    "STD_charity_ded_nonitemizers_max": {"2020": 300.0, "2021": 0.0},
+    "ID_Charity_crt_cash": {"2020": 1.0, "2022": 0.6},
+    "STD_allow_charity_ded_nonitemizers": {"2020": true, "2022": false},
+    "STD_charity_ded_nonitemizers_max": {
+        "2020": [300, 600, 300, 300, 300],
+        "2022": [  0,   0,   0,   0,   0]
+    },
     "RRC_ps": {"2020": [75000, 150000, 75000, 112500,150000],
                "2021": [75000, 150000, 75000, 112500,150000]},
     "RRC_prt": {"2020": 0.05, "2021": 0},

diff --git a/taxcalc/reforms/TCJA.json b/taxcalc/reforms/TCJA.json
@@ -133,8 +133,8 @@
                "2026": 0.03},
     "ID_crt": {"2018": 1.0,
                "2026": 0.8},
-    "ID_Charity_crt_all": {"2018": 0.6,
-                           "2026": 0.5},
+    "ID_Charity_crt_cash": {"2018": 0.6,
+                            "2026": 0.5},
     "ID_Casualty_hc": {"2018": 1,
                        "2026": 0},
     "ID_AllTaxes_c": {"2018": [10000, 10000, 5000, 10000, 10000],

diff --git a/taxcalc/reforms/archive/TCJA_Reconciliation.json b/taxcalc/reforms/archive/TCJA_Reconciliation.json
@@ -166,7 +166,7 @@
         "_ID_crt":
             {"2018": [1],
              "2026": [0.8]},
-        "_ID_Charity_crt_all":
+        "_ID_Charity_crt_cash":
             {"2018": [0.6],
              "2026": [0.5]},
         "_ID_Casualty_hc":

diff --git a/taxcalc/reforms/archive/TCJA_Senate_111417.json b/taxcalc/reforms/archive/TCJA_Senate_111417.json
@@ -153,7 +153,7 @@
         "_ID_crt":
             {"2018": [1],
              "2026": [0.8]},
-        "_ID_Charity_crt_all":
+        "_ID_Charity_crt_cash":
             {"2018": [0.6],
              "2026": [0.5]},
         "_ID_StateLocalTax_hc":

diff --git a/taxcalc/reforms/archive/TCJA_Senate_120117.json b/taxcalc/reforms/archive/TCJA_Senate_120117.json
@@ -150,7 +150,7 @@
         "_ID_crt":
             {"2018": [1],
              "2026": [0.8]},
-        "_ID_Charity_crt_all":
+        "_ID_Charity_crt_cash":
             {"2018": [0.6],
              "2026": [0.5]},
         "_ID_Casualty_hc":

diff --git a/taxcalc/reforms/ext.json b/taxcalc/reforms/ext.json
@@ -40,7 +40,7 @@
     "AMT_em_pe": {"2026": 939533.04},
     "STD": {"2026": [15339.57, 30679.14, 15339.57, 22979.74, 30679.14]},
     "ID_AllTaxes_c": {"2026": [10000.0, 10000.0, 5000.0, 10000.0, 10000.0]},
-    "ID_Charity_crt_all": {"2026": 0.60},
+    "ID_Charity_crt_cash": {"2026": 0.60},
     "ID_Casualty_hc": {"2026": 1.00},
     "ID_Miscellaneous_hc": {"2026": 1.00},
     "ID_ps": {"2026": [9e+99, 9e+99, 9e+99, 9e+99, 9e+99]},

diff --git a/taxcalc/tests/cmpi_cps_expect.txt b/taxcalc/tests/cmpi_cps_expect.txt
@@ -67,8 +67,8 @@ ALL                    	   6.179	  22.043	 -72.0
 TABLE for ITAX
 AGI category           	     T-C	     SOI	 %diff
 [-9e+99, 1)            	  -0.020	   0.242	-108.0
-[1, 5000)              	  -1.630	   0.041	-4084.7
-[5000, 10000)          	  -7.181	   0.368	-2051.4
+[1, 5000)              	  -1.630	   0.041	-4085.6
+[5000, 10000)          	  -7.182	   0.368	-2051.5
 [10000, 15000)         	 -10.397	   1.381	-852.7
 [15000, 20000)         	  -8.674	   3.524	-346.2
 [20000, 25000)         	  -6.331	   6.191	-202.3
@@ -85,7 +85,7 @@ AGI category           	     T-C	     SOI	 %diff
 [2000000, 5000000)     	   7.754	 101.489	 -92.4
 [5000000, 10000000)    	   7.473	  56.334	 -86.7
 [10000000, 9e+99)      	  49.446	 139.611	 -64.6
-ALL                    	 918.983	1457.891	 -37.0
+ALL                    	 918.982	1457.891	 -37.0
 TABLE for SETAX
 AGI category           	     T-C	     SOI	 %diff
 [-9e+99, 1)            	   0.014	   0.656	 -97.9

diff --git a/taxcalc/tests/cmpi_puf_expect.txt b/taxcalc/tests/cmpi_puf_expect.txt
@@ -69,23 +69,23 @@ AGI category           	     T-C	     SOI	 %diff
 [-9e+99, 1)            	   3.729	   0.242	+1437.7
 [1, 5000)              	  -2.402	   0.041	-5973.3
 [5000, 10000)          	  -7.413	   0.368	-2114.3
-[10000, 15000)         	 -22.410	   1.381	-1722.4
+[10000, 15000)         	 -22.411	   1.381	-1722.4
 [15000, 20000)         	 -19.575	   3.524	-655.5
 [20000, 25000)         	 -10.028	   6.191	-262.0
 [25000, 30000)         	  -3.804	   8.753	-143.5
 [30000, 40000)         	  11.438	  25.168	 -54.6
 [40000, 50000)         	  26.142	  32.530	 -19.6
 [50000, 75000)         	  97.223	  99.792	  -2.6
-[75000, 100000)        	 105.121	 105.901	  -0.7
+[75000, 100000)        	 105.118	 105.901	  -0.7
 [100000, 200000)       	 329.752	 316.350	  +4.2
 [200000, 500000)       	 331.839	 299.832	 +10.7
-[500000, 1000000)      	 172.078	 154.389	 +11.5
-[1000000, 1500000)     	  75.634	  66.324	 +14.0
-[1500000, 2000000)     	  44.088	  39.672	 +11.1
-[2000000, 5000000)     	 114.166	 101.489	 +12.5
-[5000000, 10000000)    	  64.104	  56.334	 +13.8
-[10000000, 9e+99)      	  96.819	 139.611	 -30.7
-ALL                    	1406.499	1457.891	  -3.5
+[500000, 1000000)      	 172.070	 154.389	 +11.5
+[1000000, 1500000)     	  75.630	  66.324	 +14.0
+[1500000, 2000000)     	  44.087	  39.672	 +11.1
+[2000000, 5000000)     	 114.164	 101.489	 +12.5
+[5000000, 10000000)    	  64.082	  56.334	 +13.8
+[10000000, 9e+99)      	  96.814	 139.611	 -30.7
+ALL                    	1406.456	1457.891	  -3.5
 TABLE for SETAX
 AGI category           	     T-C	     SOI	 %diff
 [-9e+99, 1)            	   0.761	   0.656	 +16.1