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

@@ -11,11 +11,16 @@ metadata:
 
 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 +1,141 @@
+# 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 every Montana filer receives a phantom rebate credit.
+
 - name: Single filer receives the full single rebate
-  period: 2023
+  period: 2021
   input:
-    filing_status: SINGLE
-    state_code: MT
+    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
+    mt_income_tax_rebate: [1_250]
 
 - 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
+    mt_income_tax: 18.22
+
+- 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: Not in Montana
+- 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: 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

@@ -14,6 +14,17 @@ class mt_income_tax_rebate(Variable):
     # 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 lesser of the filing-status
+    # amount or the 2021 income tax liability reported on line 20 of Form 2
+    # (tax after non-refundable credits). 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 in both the indiv and joint paths. Capping this
+    # person-level amount against each spouse's own column would instead
+    # under-pay a one-earner couple electing the joint column, which the
+    # statute and the DOR rebate report (May 2024, pp. 6, 10-11) grant
+    # min($2,500, joint line 20).
     def formula(person, period, parameters):
         p = parameters(period).gov.states.mt.tax.income.credits.rebate
         filing_status = person.tax_unit("filing_status", period)