Deny the DC standard deduction to a separate filer whose spouse itemizes

changelog.d/dc-standard-deduction-separate.fixed.md

@@ -0,0 +1 @@
+Deny the DC standard deduction, basic and additional amounts, to a separate filer whose spouse itemizes (D.C. Code 47-1803.03(c)).

policyengine_us/tests/policy/baseline/gov/states/dc/tax/income/dc_standard_deduction.yaml

@@ -202,3 +202,69 @@
   output:
     # Uprated from $22,500 DC base. Must NOT be $24,150 (federal).
     dc_standard_deduction: 23_000
+
+# --- Separate filer whose spouse itemizes: D.C. Code 47-1803.03(c) ---
+
+- name: DC 2024 separate filer aged 66 whose spouse itemizes gets no standard deduction.
+  period: 2024
+  absolute_error_margin: 0.1
+  input:
+    people:
+      person1:
+        age: 66
+        is_tax_unit_head: true
+    tax_units:
+      tax_unit:
+        members: [person1]
+        filing_status: SEPARATE
+        separate_filer_itemizes: true
+    households:
+      household:
+        members: [person1]
+        state_code: DC
+  output:
+    # 47-1803.03(c): allowed to neither spouse, so neither the basic
+    # amount nor the $1,550 additional amount for age.
+    dc_standard_deduction: 0
+
+- name: DC 2025 separate filer aged 66 whose spouse itemizes gets no standard deduction.
+  period: 2025
+  absolute_error_margin: 0.1
+  input:
+    people:
+      person1:
+        age: 66
+        is_tax_unit_head: true
+    tax_units:
+      tax_unit:
+        members: [person1]
+        filing_status: SEPARATE
+        separate_filer_itemizes: true
+    households:
+      household:
+        members: [person1]
+        state_code: DC
+  output:
+    # Neither the $15,000 DC basic amount nor the $1,600 additional amount.
+    dc_standard_deduction: 0
+
+- name: DC 2025 separate filer aged 66 whose spouse does not itemize.
+  period: 2025
+  absolute_error_margin: 0.1
+  input:
+    people:
+      person1:
+        age: 66
+        is_tax_unit_head: true
+    tax_units:
+      tax_unit:
+        members: [person1]
+        filing_status: SEPARATE
+        separate_filer_itemizes: false
+    households:
+      household:
+        members: [person1]
+        state_code: DC
+  output:
+    # $15,000 DC basic + $1,600 additional (married, 65+) = $16,600
+    dc_standard_deduction: 16_600

policyengine_us/variables/gov/states/dc/tax/income/deductions/dc_standard_deduction.py

@@ -9,16 +9,20 @@ class dc_standard_deduction(Variable):
     definition_period = YEAR
     defined_for = StateCode.DC
     reference = (
+        # 47-1803.03(c): when spouses file separate returns and one itemizes,
+        # the standard deduction "shall be allowed to neither".
+        "https://code.dccouncil.gov/us/dc/council/code/sections/47-1803.03#(c)",
         "https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2025_D40_Book_082026_v1.pdf#page=13",
     )
 
     def formula(tax_unit, period, parameters):
         # Before 2025, DC conformed to federal standard deduction
-        return add(
+        standard = add(
             tax_unit,
             period,
             ["basic_standard_deduction", "additional_standard_deduction"],
         )
+        return where(tax_unit("separate_filer_itemizes", period), 0, standard)
 
     def formula_2025(tax_unit, period, parameters):
         # Starting 2025, DC established its own basic standard deduction
@@ -28,4 +32,4 @@ def formula_2025(tax_unit, period, parameters):
         filing_status = tax_unit("filing_status", period)
         basic = p.amount[filing_status]
         additional = add(tax_unit, period, ["additional_standard_deduction"])
-        return basic + additional
+        return where(tax_unit("separate_filer_itemizes", period), 0, basic + additional)