Apply Iowa's 2018 miscellaneous deduction and high-income itemized limitation

changelog.d/ia-2018-misc-deduction.fixed.md

@@ -0,0 +1 @@
+Keep Iowa's 2018 miscellaneous itemized deduction above 2% of federal AGI, which Iowa did not suspend until 2019, and apply Iowa's 2018 limitation on the itemized deductions of filers with federal AGI above the IA 104 applicable amounts.

policyengine_us/parameters/gov/states/ia/tax/income/deductions/itemized/limitation/agi_rate.yaml

@@ -0,0 +1,12 @@
+description: Iowa reduces itemized deductions by this fraction of federal adjusted gross income above the applicable amount, up to the itemized deductions cap.
+values:
+  2018-01-01: 0.03
+metadata:
+  unit: /1
+  period: year
+  label: Iowa itemized deductions limitation adjusted gross income rate
+  reference:
+    - title: 2018 IA 104 Iowa Itemized Deductions Worksheet, line 10
+      href: https://revenue.iowa.gov/media/2335/download?inline=#page=1
+    - title: 26 U.S. Code § 68(a)(1) (2014 edition), in effect on January 1, 2015
+      href: https://www.govinfo.gov/content/pkg/USCODE-2014-title26/html/USCODE-2014-title26-subtitleA-chap1-subchapB-partI-sec68.htm

policyengine_us/parameters/gov/states/ia/tax/income/deductions/itemized/limitation/applicable_amount.yaml

@@ -0,0 +1,24 @@
+description: Iowa limits the itemized deductions of filers whose federal adjusted gross income exceeds this amount, based on federal filing status.
+metadata:
+  propagate_metadata_to_children: true
+  label: Iowa itemized deductions limitation applicable amount
+  period: year
+  unit: currency-USD
+  breakdown:
+    - filing_status
+  reference:
+    - title: 2018 IA 104 Iowa Itemized Deductions Worksheet, line 8
+      href: https://revenue.iowa.gov/media/2335/download?inline=#page=1
+    - title: Rev. Proc. 2017-58, section 3.15, applicable amounts under section 68(b) for 2018
+      href: https://www.irs.gov/pub/irs-drop/rp-17-58.pdf#page=14
+
+SINGLE:
+  2018-01-01: 266_700
+JOINT:
+  2018-01-01: 320_000
+SEPARATE:
+  2018-01-01: 160_000
+HEAD_OF_HOUSEHOLD:
+  2018-01-01: 293_350
+SURVIVING_SPOUSE:
+  2018-01-01: 320_000

policyengine_us/parameters/gov/states/ia/tax/income/deductions/itemized/limitation/itemized_deduction_rate.yaml

@@ -0,0 +1,12 @@
+description: Iowa caps the reduction of itemized deductions at this fraction of the itemized deductions subject to the limitation.
+values:
+  2018-01-01: 0.8
+metadata:
+  unit: /1
+  period: year
+  label: Iowa itemized deductions limitation cap rate
+  reference:
+    - title: 2018 IA 104 Iowa Itemized Deductions Worksheet, line 6
+      href: https://revenue.iowa.gov/media/2335/download?inline=#page=1
+    - title: 26 U.S. Code § 68(a)(2) (2014 edition), in effect on January 1, 2015
+      href: https://www.govinfo.gov/content/pkg/USCODE-2014-title26/html/USCODE-2014-title26-subtitleA-chap1-subchapB-partI-sec68.htm

policyengine_us/parameters/gov/states/ia/tax/income/deductions/itemized/limitation/retained.yaml

@@ -0,0 +1,20 @@
+description: Iowa keeps the limitation on the itemized deductions of high-income filers, which federal law suspends from 2018, if this is true.
+values:
+  2017-01-01: false
+  2018-01-01: true
+  2019-01-01: false
+metadata:
+  unit: bool
+  period: year
+  label: Iowa retains the itemized deductions limitation
+  reference:
+    - title: Iowa Code 422.3(5) (2018), Internal Revenue Code as amended and in effect on January 1, 2015
+      href: https://www.legis.iowa.gov/docs/code/2018/422.3.pdf#page=1
+    - title: 2018 Iowa Acts, chapter 1161, sections 58, 63, 66 and 69
+      href: https://www.legis.iowa.gov/docs/acts/2018/CH1161.pdf#page=14
+    - title: 2018 IA 1040 expanded instructions, Schedule A line 26
+      href: https://revenue.iowa.gov/media/2228/download?inline=#page=55
+    - title: 2018 IA 104 Iowa Itemized Deductions Worksheet
+      href: https://revenue.iowa.gov/media/2335/download?inline=#page=1
+    - title: 2019 IA 1040 Schedule A, line 21
+      href: https://revenue.iowa.gov/media/2490/download?inline=#page=1

policyengine_us/parameters/gov/states/ia/tax/income/deductions/itemized/misc_deduction_retained.yaml

@@ -0,0 +1,20 @@
+description: Iowa keeps the miscellaneous itemized deduction above 2% of adjusted gross income, which federal law suspends from 2018, if this is true.
+values:
+  2017-01-01: false
+  2018-01-01: true
+  2019-01-01: false
+metadata:
+  unit: bool
+  period: year
+  label: Iowa retains the miscellaneous itemized deduction
+  reference:
+    - title: Iowa Code 422.3(5) (2018), Internal Revenue Code as amended and in effect on January 1, 2015
+      href: https://www.legis.iowa.gov/docs/code/2018/422.3.pdf#page=1
+    - title: Iowa Code 422.9(2) (2018), miscellaneous expenses deductible under the Internal Revenue Code
+      href: https://www.legis.iowa.gov/docs/code/2018/422.9.pdf#page=1
+    - title: 2018 IA 1040 expanded instructions, Schedule A job expenses and miscellaneous deductions
+      href: https://revenue.iowa.gov/media/2228/download?inline=#page=54
+    - title: 2018 IA Schedule A, lines 19 to 24
+      href: https://revenue.iowa.gov/media/2298/download?inline=#page=1
+    - title: 2019 IA 1040 expanded instructions, Schedule A
+      href: https://revenue.iowa.gov/media/2492/download?inline=#page=49

policyengine_us/tests/policy/baseline/gov/states/ia/tax/income/ia_itemized_deductions_indiv.yaml

@@ -21,3 +21,38 @@
         state_code: IA
   output:
     ia_itemized_deductions_indiv: [24_000, 6_000]
+
+- name: 2018 spouses filing separately on a combined return split the limited total
+  period: 2018
+  input:
+    people:
+      person1:
+        is_tax_unit_head: true
+        ia_net_income: 300_000
+        real_estate_taxes: 8_000
+        deductible_mortgage_interest: 14_000
+        ia_withheld_income_tax: 15_000
+      person2:
+        is_tax_unit_spouse: true
+        ia_net_income: 100_000
+        ia_withheld_income_tax: 5_000
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+        filing_status: JOINT
+        adjusted_gross_income: 400_000
+        charitable_deduction: 6_000
+        medical_expense_deduction: 4_000
+        state_sales_tax: 0
+        local_sales_tax: 0
+    households:
+      household:
+        members: [person1, person2]
+        state_code: IA
+  output:
+    # 2018 IA 104 line 21 with the $320,000 joint amount: 30,600 (see
+    # ia_itemized_deductions_reduction.yaml). 2018 IA Schedule A lines 29 to
+    # 33 split it by net income: 300,000 / 400,000 = 75.0%, so 22,950 and
+    # 7,650: https://revenue.iowa.gov/media/2298/download?inline=#page=1
+    ia_itemized_deductions_unit: 30_600
+    ia_itemized_deductions_indiv: [22_950, 7_650]