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Streamline dependent-credit logic and update documentation #1937

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Mar 30, 2018
Merged

Streamline dependent-credit logic and update documentation #1937

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2ddb4a1
Streamline calculation of dependent credit
martinholmer Mar 26, 2018
e77e322
Revise _DependentCredit_* values in 2017_law.json file
martinholmer Mar 27, 2018
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6 changes: 3 additions & 3 deletions taxcalc/calculate.py
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Original file line number Diff line number Diff line change
Expand Up @@ -20,8 +20,8 @@
DependentCare, ALD_InvInc_ec_base, CapGains,
SSBenefits, UBI, AGI, ItemDedCap, ItemDed,
StdDed, AdditionalMedicareTax, F2441, EITC,
SchR, ChildTaxCredit, AdditionalCTC, CTC_new,
PersonalTaxCredit,
ChildDepTaxCredit, AdditionalCTC, CTC_new,
PersonalTaxCredit, SchR,
AmOppCreditParts, EducationTaxCredit,
NonrefundableCredits, C1040, IITAX,
BenefitSurtax, BenefitLimitation,
Expand Down Expand Up @@ -1420,7 +1420,7 @@ def _calc_one_year(self, zero_out_calc_vars=False):
self._taxinc_to_amt()
F2441(self.__policy, self.__records)
EITC(self.__policy, self.__records)
ChildTaxCredit(self.__policy, self.__records)
ChildDepTaxCredit(self.__policy, self.__records)
PersonalTaxCredit(self.__policy, self.__records)
AmOppCreditParts(self.__policy, self.__records)
SchR(self.__policy, self.__records)
Expand Down
44 changes: 10 additions & 34 deletions taxcalc/current_law_policy.json
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Expand Up @@ -5118,37 +5118,13 @@
"compatible_data": {"puf": true, "cps": true}
},

"_DependentCredit_c": {
"long_name": "Nonrefundable credit for dependents",
"description": "This nonrefundable credit is applied to (child and non-child) dependents and phases out with the Child Tax Credit. The dependent credit's phaseout begins when the CTC's phaseout ends.",
"section_1": "Nonrefundable Credits",
"section_2": "Child Tax Credit",
"irs_ref": "",
"notes": "The Ryan-Brady tax proposal sets this at $500",
"row_var": "FLPDYR",
"row_label": ["2013"],
"start_year": 2013,
"cpi_inflatable": true,
"cpi_inflated": false,
"col_var": "",
"col_label": "",
"boolean_value": false,
"integer_value": false,
"value": [0.0],
"range": {"min": 0, "max": 9e99},
"out_of_range_minmsg": "",
"out_of_range_maxmsg": "",
"out_of_range_action": "stop",
"compatible_data": {"puf": true, "cps": true}
},

"_DependentCredit_Child_c": {
"long_name": "Nonrefundable credit for children, on top of the child tax credit",
"description": "This nonrefundable credit is applied to children and phases out with the Child Tax Credit. The dependent credit's phaseout begins when the CTC's phaseout ends.",
"long_name": "Nonrefundable credit for child dependents on top of the child tax credit",
"description": "This nonrefundable credit is applied to child dependents and begins phasing out after the CTC phaseout ends.",
"section_1": "Nonrefundable Credits",
"section_2": "Child Tax Credit",
"irs_ref": "",
"notes": "First introduced in TCJA bills",
"notes": "Become current-law policy with passage of TCJA",
"row_var": "FLPDYR",
"row_label": ["2013",
"2014",
Expand Down Expand Up @@ -5193,12 +5169,12 @@
},

"_DependentCredit_Nonchild_c": {
"long_name": "Nonrefundable credit for non-child dependents",
"description": "This nonrefundable credit is applied to non-child dependents and phases out with the Child Tax Credit. The dependent credit's phaseout begins when the CTC's phaseout ends.",
"long_name": "Nonrefundable credit for non-child dependents on top of the child tax credit",
"description": "This nonrefundable credit is applied to non-child dependents and begins phasing out after the CTC phaseout ends.",
"section_1": "Nonrefundable Credits",
"section_2": "Child Tax Credit",
"irs_ref": "",
"notes": "First introduced in TCJA bills",
"notes": "Become current-law policy with passage of TCJA",
"row_var": "FLPDYR",
"row_label": ["2013",
"2014",
Expand Down Expand Up @@ -5244,11 +5220,11 @@

"_DependentCredit_before_CTC": {
"long_name": "Stack the Dependent Credit before the Child Tax Credit",
"description": "Stack the draw down of the Dependent Credit against liabilities before the drawdown of the Child Tax Credit.",
"description": "Place the drawdown of the nonrefundable Dependent Credit against tax liability before the drawdown of the Child Tax Credit.",
"section_1": "Nonrefundable Credits",
"section_2": "Child Tax Credit",
"irs_ref": "",
"notes": "",
"notes": "Become part of current-law policy with passage of TCJA",
"row_var": "FLPDYR",
"row_label": ["2013",
"2014",
Expand Down Expand Up @@ -5277,8 +5253,8 @@
},

"_FilerCredit_c": {
"long_name": "Nonrefundable credit for filer and spouse",
"description": "This nonrefundable credit is applied to the filer and spouse and phases out with the Child Tax Credit. The filer credit's phaseout begins when the CTC's phaseout ends.",
"long_name": "Nonrefundable credit for each filing unit",
"description": "This nonrefundable credit is applied to the filing unit and begins phasing out after the CTC phaseout ends.",
"section_1": "Nonrefundable Credits",
"section_2": "Child Tax Credit",
"irs_ref": "",
Expand Down
45 changes: 23 additions & 22 deletions taxcalc/functions.py
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Original file line number Diff line number Diff line change
@@ -1,3 +1,4 @@

"""
Tax-Calculator functions that calculate payroll and individual income taxes.

Expand Down Expand Up @@ -1210,34 +1211,34 @@ def EITC(MARS, DSI, EIC, c00100, e00300, e00400, e00600, c01000,


@iterate_jit(nopython=True)
def ChildTaxCredit(n24, MARS, c00100, exact,
CTC_c, CTC_ps, CTC_prt, prectc, nu05,
CTC_c_under5_bonus, XTOT, num,
DependentCredit_Child_c, DependentCredit_Nonchild_c,
DependentCredit_c, FilerCredit_c, dep_credit):
"""
Computes prectc amount and dependent credit.
"""
# calculate prectc amount
prectc = CTC_c * n24 + CTC_c_under5_bonus * nu05
modAGI = c00100 # no deducted foreign earned income to add
if modAGI > CTC_ps[MARS - 1]:
def ChildDepTaxCredit(n24, MARS, c00100, exact,
CTC_c, CTC_ps, CTC_prt, prectc, nu05,
CTC_c_under5_bonus, XTOT, num,
DependentCredit_Child_c, DependentCredit_Nonchild_c,
FilerCredit_c, dep_credit):
"""
Computes pre-CTC amount (prectc) and nonrefundable dependent credit.
"""
modAGI = c00100 # no foreign earned income deduction to add to AGI
# calculate and phase-out pre-CTC amount
base_ctc = CTC_c * n24 + CTC_c_under5_bonus * nu05
prectc = base_ctc
if prectc > 0. and modAGI > CTC_ps[MARS - 1]:
excess = modAGI - CTC_ps[MARS - 1]
if exact == 1: # exact calculation as on tax forms
excess = 1000. * math.ceil(excess / 1000.)
prectc = max(0., prectc - CTC_prt * excess)
# calculate and phase-out dependent credit
dep_credit = (DependentCredit_c * max(0, XTOT - num) +
DependentCredit_Child_c * n24 +
# calculate and phase-out dependent credit after pre-CTC is phased out
dep_credit = (DependentCredit_Child_c * n24 +
DependentCredit_Nonchild_c * max(0, XTOT - n24 - num) +
FilerCredit_c[MARS - 1])
if CTC_prt > 0. and c00100 > CTC_ps[MARS - 1]:
thresh = CTC_ps[MARS - 1] + n24 * CTC_c / CTC_prt
excess = c00100 - thresh
if exact == 1: # exact calculation as on tax forms
excess = 1000. * math.ceil(excess / 1000.)
dep_phaseout = CTC_prt * (c00100 - excess)
dep_credit = max(0., dep_credit - dep_phaseout)
if dep_credit > 0. and CTC_prt > 0.:
thresh = CTC_ps[MARS - 1] + base_ctc / CTC_prt
if modAGI > thresh:
excess = modAGI - thresh
if exact == 1: # exact calculation as on tax forms
excess = 1000. * math.ceil(excess / 1000.)
dep_credit = max(0., dep_credit - CTC_prt * excess)
return (prectc, dep_credit)


Expand Down
2 changes: 1 addition & 1 deletion taxcalc/records_variables.json
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Expand Up @@ -966,7 +966,7 @@
},
"dep_credit": {
"type": "float",
"desc": "search taxcalc/functions.py for how calculated and used",
"desc": "Dependent Credit added on top of Child Tax Credit",
"form": {"2013-20??": "calculated variable"}
},
"personal_refundable_credit": {
Expand Down
5 changes: 2 additions & 3 deletions taxcalc/reforms/2017_law.json
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Expand Up @@ -15,7 +15,7 @@
// - 1: _II_rt? and _PT_rt?
// - 2: four _PT_excl_* parameters
// - 3: _CTC_c and _CTC_ps and _ACTC_Income_thd
// - 4: four different _DependentCredit_* parameters
// - 4: three different _DependentCredit_* parameters
// - 5: three _ALD_* parameters
// - 6: seven different _ID_* parameters
// NOTE: this reform projects pre-TCJA 2017 parameter values forward using the
Expand Down Expand Up @@ -46,8 +46,7 @@
"_ACTC_Income_thd": {"2018": [3000.0]},
"_DependentCredit_Child_c": {"2018": [0.0]},
"_DependentCredit_Nonchild_c": {"2018": [0.0]},
"_DependentCredit_Nonchild_c": {"2018": [0.0]},
"_DependentCredit_before_CTC": {"2018": [0.0]},
"_DependentCredit_before_CTC": {"2018": [false]},
"_ALD_AlimonyPaid_hc": {"2019": [0.0]},
"_ALD_AlimonyReceived_hc": {"2019": [1.0]},
"_ALD_DomesticProduction_hc": {"2018": [0.0]},
Expand Down
6 changes: 4 additions & 2 deletions taxcalc/reforms/RyanBrady.json
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Expand Up @@ -22,7 +22,7 @@
// - 5: _NIIT_rt
// - 6: _STD
// - 7: _II_em
// - 8: _DependentCredit_c
// - 8: _DependentCredit_Child_c, _DependentCredit_Nonchild_c
// - 9: _CTC_ps
// - 10: _ID*
{
Expand Down Expand Up @@ -73,7 +73,9 @@
{"2017": [[0, 0, 0, 0, 0]]},
"_II_em":
{"2017": [0]},
"_DependentCredit_c":
"_DependentCredit_Child_c":
{"2017": [500]},
"_DependentCredit_Nonchild_c":
{"2017": [500]},
"_CTC_ps":
{"2017": [[75000, 150000, 75000, 75000, 75000]]},
Expand Down
6 changes: 3 additions & 3 deletions taxcalc/reforms/TCJA_House.out
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Expand Up @@ -8,6 +8,6 @@
6 0 0 0 0 0 0 0 0
7 180000 0 56209 123791 14942 8942 27540 157288
8 0 0 0 0 0 0 0 0
9 240000 0 43718 196282 27758 23008 36720 198632
10 600000 0 37473 562527 136297 134397 66067 431850
sums 1080000 0 168627 911373 182449 165671 139507 843855
9 240000 0 43718 196282 27758 22308 36720 199332
10 600000 0 37473 562527 136297 132997 66067 433250
sums 1080000 0 168627 911373 182449 163571 139507 845955
6 changes: 3 additions & 3 deletions taxcalc/reforms/TCJA_House_Amended.out
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Expand Up @@ -8,6 +8,6 @@
6 0 0 0 0 0 0 0 0
7 180000 0 56209 123791 14942 8942 27540 157288
8 0 0 0 0 0 0 0 0
9 240000 0 43718 196282 27758 23008 36720 198632
10 600000 0 37473 562527 136297 134397 66067 431850
sums 1080000 0 168627 911373 182449 165671 139507 843855
9 240000 0 43718 196282 27758 22308 36720 199332
10 600000 0 37473 562527 136297 132997 66067 433250
sums 1080000 0 168627 911373 182449 163571 139507 845955
4 changes: 2 additions & 2 deletions taxcalc/tests/reforms.json
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Expand Up @@ -618,7 +618,7 @@
"name": "Set Dependend Credit for Children at $500",
"output_type": "iitax",
"compare_with": {},
"expected": "Tax-Calculator,-8.4,-8.1,-7.9,-7.6"
"expected": "Tax-Calculator,-12.4,-12.3,-12.2,-12.1"
},

"57": {
Expand All @@ -629,7 +629,7 @@
"name": "Set Dependend Credit for Children at $500 AND stack dependent credit before CTC",
"output_type": "iitax",
"compare_with": {},
"expected": "Tax-Calculator,-14.3,-14.0,-13.8,-13.3"
"expected": "Tax-Calculator,-18.3,-18.2,-18.1,-17.8"
},

"58": {
Expand Down