Scope the Montana 2021 income tax rebate to its eligibility year

changelog.d/fix-mt-rebate-wiring.fixed.md

@@ -0,0 +1 @@
+Correct the Montana 2021 income tax rebate's reported value outside its eligibility year: without the 2022 sunset the amount backdates forward, so the variable reported a phantom rebate in 2022 and later. Montana income tax is unaffected, as the non-refundable credit list already excludes the rebate from 2022.

policyengine_us/parameters/gov/states/mt/tax/income/credits/rebate/amount.yaml

@@ -5,18 +5,27 @@ metadata:
   unit: currency-USD
   label: Montana income tax rebate amount
   reference:
-    - title: Montana Code Annotated 2023, Title 15, Chapter 30, Part 21, Section 15-30-2191 (b)
-      href: https://archive.legmt.gov/bills/mca/title_0150/chapter_0300/part_0210/section_0910/0150-0300-0210-0910.html
+    - title: MCA 15-30-2191(1)(b)(i)-(ii) (rebate amounts) and (2) (line-20 cap)
+      href: https://web.archive.org/web/20250210203531/https://archive.legmt.gov/bills/mca/title_0150/chapter_0300/part_0210/section_0910/0150-0300-0210-0910.html
+    - title: Montana HB 192 (Ch. 44, L. 2023), enrolled bill, sec. 2
+      href: https://web.archive.org/web/20230626082025/https://leg.mt.gov/bills/2023/billpdf/HB0192.pdf
+    - title: Montana Department of Revenue, Income tax and property tax rebate report, May 2024, p. 8
+      href: https://archive.legmt.gov/content/Committees/Interim/2023-2024/Revenue/Meetings/May-2024/5.1-DOR-rebate-report.pdf#page=8
   breakdown:
     - filing_status
 
 SINGLE:
   2021-01-01: 1_250
+  2022-01-01: 0
 HEAD_OF_HOUSEHOLD:
   2021-01-01: 1_250
+  2022-01-01: 0
 JOINT:
   2021-01-01: 2_500
+  2022-01-01: 0
 SURVIVING_SPOUSE:
   2021-01-01: 2_500
+  2022-01-01: 0
 SEPARATE:
-  2021-01-01: 1_250 
+  2021-01-01: 1_250
+  2022-01-01: 0

policyengine_us/tests/policy/baseline/gov/states/mt/tax/income/credits/rebate/mt_income_tax_rebate.yaml

@@ -1,35 +1,249 @@
+# The rebate is keyed to the 2021 tax year (MCA 15-30-2191(1)); it was paid out
+# in 2023 but is booked in the eligibility year. All active-year cases therefore
+# run at period 2021. Cases at 2022 and 2023 guard the year-scoping added by
+# amount.yaml's `2022-01-01: 0` entries: without them, backdating fills the 2021
+# amounts forward and the variable reports a phantom rebate.
+
 - name: Single filer receives the full single rebate
-  period: 2023
+  period: 2021
+  input:
+    people:
+      person1:
+        age: 45
+        employment_income: 50_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: MT
+  output:
+    mt_income_tax_rebate: [1_250]
+
+- name: Head of household receives the single-status rebate amount
+  period: 2021
   input:
-    filing_status: SINGLE
-    state_code: MT
+    people:
+      person1:
+        age: 45
+        employment_income: 50_000
+      child:
+        age: 10
+    tax_units:
+      tax_unit:
+        members: [person1, child]
+    households:
+      household:
+        members: [person1, child]
+        state_code: MT
+  output:
+    # MCA 15-30-2191(1)(b)(i): $1,250 for a head of household. Dependents get
+    # nothing, since the amount is gated on is_tax_unit_head_or_spouse.
+    filing_status: HEAD_OF_HOUSEHOLD
+    mt_income_tax_rebate: [1_250, 0]
+
+- name: Surviving spouse receives the joint rebate amount
+  period: 2021
+  input:
+    people:
+      person1:
+        age: 45
+        employment_income: 50_000
+      child:
+        age: 10
+    tax_units:
+      tax_unit:
+        members: [person1, child]
+        filing_status: SURVIVING_SPOUSE
+    households:
+      household:
+        members: [person1, child]
+        state_code: MT
   output:
-    mt_income_tax_rebate: 1_250
+    # The statute does not name a surviving spouse. Montana derives filing
+    # status from the federal return, where a qualifying surviving spouse uses
+    # the joint rate schedule, so the $2,500 joint maximum is the consistent
+    # reading. Only one filer claims it here, so it is not split.
+    mt_income_tax_rebate: [2_500, 0]
 
 - name: Joint filers split the per-return rebate across each spouse's column
-  period: 2023
+  period: 2021
+  absolute_error_margin: 0.01
   input:
     people:
       person1:
-        is_tax_unit_head: true
+        age: 45
+        employment_income: 60_000
       person2:
-        is_tax_unit_spouse: true
+        age: 45
+    marital_units:
+      marital_unit:
+        members: [person1, person2]
     tax_units:
       tax_unit:
         members: [person1, person2]
-        filing_status: JOINT
     households:
       household:
         members: [person1, person2]
         state_code: MT
   output:
     # $2,500 per-return cap split $1,250 per spouse (sums to $2,500, not $5,000)
     mt_income_tax_rebate: [1_250, 1_250]
+    # End to end: 2,518.22 pre-credit - 2,500 pooled rebate = 18.22.
+    # The 2022 clone of this household below is the year boundary.
+    mt_income_tax_before_non_refundable_credits_joint: 2_518.22
+    mt_income_tax: 18.22
+
+- name: The same joint household owes more in 2022, when no rebate applies
+  period: 2022
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 45
+        employment_income: 60_000
+      person2:
+        age: 45
+    marital_units:
+      marital_unit:
+        members: [person1, person2]
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: MT
+  output:
+    # Boundary pair with the 2021 case above. The pre-credit joint base is
+    # lower in 2022 than in 2021 (2,394.50 against 2,518.22), yet net tax is
+    # far higher (2,394.50 against 18.22), because the $2,500 rebate applies
+    # only in 2021. Nothing else offsets the base here.
+    mt_income_tax_rebate: [0, 0]
+    mt_income_tax_before_non_refundable_credits_joint: 2_394.50
+    mt_non_refundable_credits: [0, 0]
+    mt_income_tax: 2_394.50
+
+- name: Single filer below the cap keeps only the liability she owes
+  period: 2021
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 45
+        employment_income: 25_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: MT
+  output:
+    # 2021 liability of $625.40 sits strictly between zero and the $1,250
+    # statutory maximum, so MCA 15-30-2191(2) limits the rebate to $625.40.
+    # The variable still reports the uncapped $1,250. Both credit paths
+    # floor at zero, so the cap is realized downstream:
+    # mt_income_tax_before_refundable_credits_indiv is 0, and because
+    # mt_files_separately is False here the delivered mt_income_tax comes
+    # from the joint path, also floored to 0. No refundable credit is in
+    # play (mt_eitc is 0 at this income).
+    mt_income_tax_rebate: [1_250]
+    mt_income_tax_before_non_refundable_credits_indiv: [625.40]
+    mt_income_tax_before_refundable_credits_indiv: [0]
+    mt_eitc: [0]
+    mt_income_tax: 0
+
+- name: Rebate cannot drive liability below zero (MCA 15-30-2191(2))
+  period: 2021
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 45
+        employment_income: 20_000
+      person2:
+        age: 45
+    marital_units:
+      marital_unit:
+        members: [person1, person2]
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: MT
+  output:
+    # The statutory "lesser of the amount or the liability" cap is enforced by
+    # the ordered credit application, not by the rebate variable: the full
+    # $2,500 is reported, but the joint path floors at zero, so a household
+    # whose pre-credit liability is only $252.40 keeps $252.40 of benefit and
+    # no more. (mt_income_tax itself goes to -33.81 here from the refundable
+    # Montana EITC, which is unrelated to the rebate.)
+    mt_income_tax_rebate: [1_250, 1_250]
+    mt_income_tax_before_non_refundable_credits_joint: 252.40
+    mt_income_tax_before_refundable_credits_joint: 0
+
+- name: No rebate outside Montana
+  period: 2021
+  input:
+    people:
+      person1:
+        age: 45
+        employment_income: 50_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: AR
+  output:
+    mt_income_tax_rebate: [0]
+
+- name: No phantom rebate value in 2022
+  period: 2022
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 45
+        employment_income: 50_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: MT
+  output:
+    # This is the discriminating assertion: without amount.yaml's 2022
+    # zeroing, backdating fills the 2021 amount forward and this reads
+    # 1_250. Montana tax is NOT affected either way, because
+    # credits/non_refundable.yaml already drops mt_income_tax_rebate from
+    # the list at 2022-01-01 - so the defect is the variable's reported
+    # value, which mis-feeds consumers such as the TAXSIM srebate
+    # comparison, not the tax outcome. mt_income_tax and
+    # mt_non_refundable_credits are pinned here as unchanged controls.
+    mt_income_tax_rebate: [0]
+    mt_non_refundable_credits: [0]
+    mt_income_tax: 2_246.00
 
-- name: Not in Montana
+- name: No rebate in 2023, the year the rebate was actually paid out
   period: 2023
   input:
-    filing_status: JOINT
-    state_code: AR
+    people:
+      person1:
+        age: 45
+        employment_income: 50_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: MT
   output:
-    mt_income_tax_rebate: 0
+    mt_income_tax_rebate: [0]

policyengine_us/variables/gov/states/mt/tax/income/credits/rebate/mt_income_tax_rebate.py

@@ -7,13 +7,29 @@ class mt_income_tax_rebate(Variable):
     label = "Montana 2021 income tax rebate"
     unit = USD
     definition_period = YEAR
-    reference = "https://archive.legmt.gov/bills/mca/title_0150/chapter_0300/part_0210/section_0910/0150-0300-0210-0910.html"
+    reference = [
+        # MCA 15-30-2191(1)(b)(i)-(ii) (rebate amounts) and (2) (line-20 cap)
+        "https://web.archive.org/web/20250210203531/https://archive.legmt.gov/bills/mca/title_0150/chapter_0300/part_0210/section_0910/0150-0300-0210-0910.html",
+        # Montana HB 192 (Ch. 44, L. 2023), enrolled bill, sec. 2
+        "https://web.archive.org/web/20230626082025/https://leg.mt.gov/bills/2023/billpdf/HB0192.pdf",
+        # Montana Department of Revenue, income tax and property tax rebate
+        # report, May 2024, p. 8
+        "https://archive.legmt.gov/content/Committees/Interim/2023-2024/Revenue/Meetings/May-2024/5.1-DOR-rebate-report.pdf#page=8",
+    ]
     defined_for = StateCode.MT
 
     # The rebate is based on 2021 income tax liability, but provided in 2023.
     # It applies once per return (MCA 15-30-2191(1)), so joint filers split
     # the per-return cap across each spouse's column ($1,250 each) to avoid
     # double-counting when the person-level non-refundable credits are pooled.
+    #
+    # MCA 15-30-2191(2) caps the rebate at the 2021 liability reported on line
+    # 20 of Form 2. That cap is not applied here: the ordered non-refundable
+    # credit application already floors each path at zero, so the effective
+    # rebate is line-20-capped per filing configuration. The guarding cases are
+    # "Single filer below the cap" and "Rebate cannot drive liability below
+    # zero" in the matching test file under
+    # tests/policy/baseline/gov/states/mt/tax/income/credits/rebate/.
     def formula(person, period, parameters):
         p = parameters(period).gov.states.mt.tax.income.credits.rebate
         filing_status = person.tax_unit("filing_status", period)