Apply Virginia's rules for a filer who can be claimed as a dependent

changelog.d/claimable-filer-va.fixed.md

@@ -0,0 +1 @@
+Apply Virginia's rules for a filer who can be claimed as a dependent: the standard deduction is limited to the filers' earned income (Va. Code 58.1-322.03(1)(b)), personal exemptions follow those allowable federally (also under the dependent exemption reform), and the EITC alternatives are barred (58.1-339.8(B)(1)); the aged and blind exemption now goes only to aged or blind filers, while a blind or aged dependent still bars the low-income credit (58.1-339.8(D)(4)).

policyengine_us/reforms/states/va/dependent_exemption/va_dependent_exemption_reform.py

@@ -16,7 +16,13 @@ def formula(tax_unit, period, parameters):
 
             person = tax_unit.members
             age = person("age", period)
-            is_dependent = person("is_tax_unit_dependent", period)
+            # As in the baseline, a return on which the filer (or, if joint,
+            # either spouse) can be claimed as a dependent has no dependents
+            # (IRC 152(b)(1)), unless the would-be claimant meets the filing
+            # exception.
+            is_dependent = person("is_tax_unit_dependent", period) & ~person.tax_unit(
+                "head_or_spouse_is_dependent_elsewhere_without_filing_exception", period
+            )
 
             # Apply age limit if in effect
             if p.age_limit.in_effect:
@@ -83,7 +89,13 @@ class va_older_dependents_count(Variable):
 
         def formula(tax_unit, period, parameters):
             person = tax_unit.members
-            is_dependent = person("is_tax_unit_dependent", period)
+            # As in the baseline, a return on which the filer (or, if joint,
+            # either spouse) can be claimed as a dependent has no dependents
+            # (IRC 152(b)(1)), unless the would-be claimant meets the filing
+            # exception.
+            is_dependent = person("is_tax_unit_dependent", period) & ~person.tax_unit(
+                "head_or_spouse_is_dependent_elsewhere_without_filing_exception", period
+            )
             total_dependents = tax_unit.sum(is_dependent)
             eligible_dependent_exemptions = tax_unit(
                 "va_eligible_dependents_count", period
@@ -104,14 +116,14 @@ def formula(tax_unit, period, parameters):
             # Calculate personal exemptions base amount (filer + spouse + older dependents)
             filing_status = tax_unit("filing_status", period)
             older_dependents = tax_unit("va_older_dependents_count", period)
-            personal_count = (
-                where(
-                    filing_status == filing_status.possible_values.JOINT,
-                    2,
-                    1,
-                )
-                + older_dependents
+            # As in the baseline, a filer whom another taxpayer can claim has
+            # no exemption of their own (IRC 151(d)(2)).
+            filers = where(
+                tax_unit("head_or_spouse_is_dependent_elsewhere", period),
+                tax_unit("head_spouse_count_not_dependent_elsewhere", period),
+                where(filing_status == filing_status.possible_values.JOINT, 2, 1),
             )
+            personal_count = filers + older_dependents
             personal_exemption_amount = personal_count * p_base
 
             # Add dependent exemption (has its own phase-out logic)

policyengine_us/tests/core/test_claimable_filer_va_invariants.py

@@ -0,0 +1,70 @@
+"""Virginia rules for a filer who can be claimed as a dependent.
+
+The standard deduction is limited to the filers' earned income, personal
+exemptions follow those allowable federally, and the EITC alternatives are
+barred (Va. Code 58.1-322.03, 58.1-339.8).
+
+For couples with either, both or neither spouse claimed:
+
+1. Swap invariance: each tax-unit output is the same under either head/spouse
+   labelling (Hypothesis batches and the seeded population).
+2. Monotonicity: marking another filer as claimed never raises an output
+   (seeded population only).
+
+The outputs are tax-unit totals; which spouse an exemption goes to is checked
+by YAML cases on the person-level variables.
+"""
+
+import pytest
+from hypothesis import HealthCheck, given, settings
+from hypothesis import strategies as st
+
+from policyengine_us.tests.core.test_claimable_filer_federal_invariants import (
+    check_monotone,
+    check_swap,
+)
+from policyengine_us.tests.core.test_dependent_elsewhere_head_spouse_swap_invariance import (
+    CLAIM_PATTERNS,
+    _crafted_cases,
+    _seeded_couples,
+    adults,
+    dependents,
+)
+
+STATES = ["VA"]
+YEARS = [2023, 2025, 2026]
+OUTPUTS = [
+    "va_standard_deduction",
+    "va_personal_exemption",
+    "va_aged_blind_exemption",
+    "va_refundable_eitc_if_claimed",
+    "va_non_refundable_eitc_if_claimed",
+]
+
+
+@st.composite
+def couples(draw):
+    return {
+        "state": draw(st.sampled_from(STATES)),
+        "adults": [draw(adults()), draw(adults())],
+        "dependents": draw(st.lists(dependents(), max_size=2)),
+        "claimed": draw(st.sampled_from(CLAIM_PATTERNS)),
+    }
+
+
+@settings(
+    max_examples=2,
+    deadline=None,
+    derandomize=True,
+    suppress_health_check=[HealthCheck.too_slow, HealthCheck.data_too_large],
+)
+@given(st.sampled_from(YEARS), st.lists(couples(), min_size=6, max_size=12))
+def test_va_claimable_filer_rules_are_label_free(year, units):
+    check_swap(units, year, OUTPUTS)
+
+
+@pytest.mark.parametrize("year", YEARS)
+def test_va_claimable_filer_rules_seeded_population(year):
+    units = _seeded_couples(STATES, per_state=3) + _crafted_cases(STATES)
+    check_swap(units, year, OUTPUTS)
+    check_monotone(units, year, OUTPUTS)

policyengine_us/tests/policy/baseline/gov/states/va/tax/income/credits/eitc/va_non_refundable_eitc_if_claimed.yaml

@@ -35,3 +35,77 @@
   output:
     # 2025: 20% of federal EITC
     va_non_refundable_eitc_if_claimed: 800
+
+
+- name: 2025 joint return with one claimable spouse gets no nonrefundable Virginia EITC (the claimable spouse is the head)
+  period: 2025
+  input:
+    people:
+      person_a:
+        age: 30
+        claimed_as_dependent_on_another_return: true
+        is_tax_unit_head: true
+        is_tax_unit_spouse: false
+      person_b:
+        age: 30
+        is_tax_unit_head: false
+        is_tax_unit_spouse: true
+    tax_units:
+      tax_unit:
+        members: [person_a, person_b]
+        filing_status: JOINT
+        eitc: 1000
+        va_low_income_tax_credit: 0
+    households:
+      household:
+        members: [person_a, person_b]
+        state_code: VA
+  output:
+    va_non_refundable_eitc_if_claimed: 0
+
+- name: 2025 joint return with one claimable spouse gets no nonrefundable Virginia EITC (the claimable spouse is the spouse)
+  period: 2025
+  input:
+    people:
+      person_b:
+        age: 30
+        is_tax_unit_head: true
+        is_tax_unit_spouse: false
+      person_a:
+        age: 30
+        claimed_as_dependent_on_another_return: true
+        is_tax_unit_head: false
+        is_tax_unit_spouse: true
+    tax_units:
+      tax_unit:
+        members: [person_b, person_a]
+        filing_status: JOINT
+        eitc: 1000
+        va_low_income_tax_credit: 0
+    households:
+      household:
+        members: [person_b, person_a]
+        state_code: VA
+  output:
+    va_non_refundable_eitc_if_claimed: 0
+
+- name: 2025 joint return with neither spouse claimable gets the nonrefundable Virginia EITC
+  period: 2025
+  input:
+    people:
+      person_a:
+        age: 30
+      person_b:
+        age: 30
+    tax_units:
+      tax_unit:
+        members: [person_a, person_b]
+        filing_status: JOINT
+        eitc: 1000
+        va_low_income_tax_credit: 0
+    households:
+      household:
+        members: [person_a, person_b]
+        state_code: VA
+  output:
+    va_non_refundable_eitc_if_claimed: 200

policyengine_us/tests/policy/baseline/gov/states/va/tax/income/credits/eitc/va_refundable_eitc_if_claimed.yaml

@@ -66,3 +66,76 @@
     eitc: 5_000
   output:
     va_refundable_eitc_if_claimed: 0
+
+
+- name: 2025 joint return with one claimable spouse gets no Virginia EITC (the claimable spouse is the head)
+  period: 2025
+  input:
+    people:
+      person_a:
+        age: 30
+        claimed_as_dependent_on_another_return: true
+        is_tax_unit_head: true
+        is_tax_unit_spouse: false
+      person_b:
+        age: 30
+        is_tax_unit_head: false
+        is_tax_unit_spouse: true
+    tax_units:
+      tax_unit:
+        members: [person_a, person_b]
+        filing_status: JOINT
+        eitc: 1000
+    households:
+      household:
+        members: [person_a, person_b]
+        state_code: VA
+  output:
+    # Va. Code 58.1-339.8(B)(1).
+    va_refundable_eitc_if_claimed: 0
+
+- name: 2025 joint return with one claimable spouse gets no Virginia EITC (the claimable spouse is the spouse)
+  period: 2025
+  input:
+    people:
+      person_b:
+        age: 30
+        is_tax_unit_head: true
+        is_tax_unit_spouse: false
+      person_a:
+        age: 30
+        claimed_as_dependent_on_another_return: true
+        is_tax_unit_head: false
+        is_tax_unit_spouse: true
+    tax_units:
+      tax_unit:
+        members: [person_b, person_a]
+        filing_status: JOINT
+        eitc: 1000
+    households:
+      household:
+        members: [person_b, person_a]
+        state_code: VA
+  output:
+    va_refundable_eitc_if_claimed: 0
+
+- name: 2025 joint return with neither spouse claimable gets the Virginia EITC
+  period: 2025
+  input:
+    people:
+      person_a:
+        age: 30
+      person_b:
+        age: 30
+    tax_units:
+      tax_unit:
+        members: [person_a, person_b]
+        filing_status: JOINT
+        eitc: 1000
+    households:
+      household:
+        members: [person_a, person_b]
+        state_code: VA
+  output:
+    # 20% x $1,000.
+    va_refundable_eitc_if_claimed: 200

policyengine_us/tests/policy/baseline/gov/states/va/tax/income/credits/low_income_credit/va_low_income_tax_credit_eligible.yaml

@@ -83,3 +83,80 @@
         state_code: VA
   output:
     va_low_income_tax_credit_eligible: false
+
+# Va. Code 58.1-339.8(D)(4): no credit when "any person claimed as a dependent"
+# claims the additional exemption for blind or aged taxpayers on their own
+# return. The model takes a blind or aged dependent to claim it.
+- name: 2025 blind dependent bars the low income tax credit
+  period: 2025
+  input:
+    people:
+      parent:
+        age: 40
+        is_tax_unit_head: true
+        is_tax_unit_spouse: false
+      child:
+        age: 16
+        is_blind: true
+        is_tax_unit_head: false
+        is_tax_unit_spouse: false
+    tax_units:
+      tax_unit:
+        members: [parent, child]
+    households:
+      household:
+        members: [parent, child]
+        state_code: VA
+  output:
+    va_aged_blind_exemption: 0
+    va_low_income_tax_credit_eligible: false
+
+- name: 2025 aged dependent bars the low income tax credit
+  period: 2025
+  input:
+    people:
+      person_a:
+        age: 40
+        is_tax_unit_head: true
+        is_tax_unit_spouse: false
+      person_b:
+        age: 40
+        is_tax_unit_head: false
+        is_tax_unit_spouse: true
+      parent:
+        age: 70
+        is_tax_unit_head: false
+        is_tax_unit_spouse: false
+    tax_units:
+      tax_unit:
+        members: [person_a, person_b, parent]
+        filing_status: JOINT
+    households:
+      household:
+        members: [person_a, person_b, parent]
+        state_code: VA
+  output:
+    va_aged_blind_exemption: 0
+    va_low_income_tax_credit_eligible: false
+
+- name: 2025 dependent who is neither blind nor aged does not bar the low income tax credit
+  period: 2025
+  input:
+    people:
+      parent:
+        age: 40
+        is_tax_unit_head: true
+        is_tax_unit_spouse: false
+      child:
+        age: 16
+        is_tax_unit_head: false
+        is_tax_unit_spouse: false
+    tax_units:
+      tax_unit:
+        members: [parent, child]
+    households:
+      household:
+        members: [parent, child]
+        state_code: VA
+  output:
+    va_low_income_tax_credit_eligible: true