Cap the Montana 2021 income tax rebate at liability (MCA 15-30-2191(2)(b)) and scope it to 2021

changelog.d/mt-income-tax-rebate-liability-cap.fixed.md

@@ -0,0 +1 @@
+Cap the Montana 2021 income tax rebate at the taxpayer's pre-credit liability per MCA 15-30-2191(2)(b) and zero the amounts from 2022, fixing the variable's reported value; Montana income tax results are unchanged because the credit application already floored the applied amount.

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

@@ -1,23 +1,98 @@
-- name: Single filer
-  period: 2023
+- name: Single filer with liability above the rebate amount
+  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
 
-- name: Joint filers
-  period: 2023
+- name: Joint filers with liability above the rebate amount
+  period: 2021
   input:
-    filing_status: JOINT
-    state_code: MT
+    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:
     mt_income_tax_rebate: 2_500
 
-- name: Not in Montana
-  period: 2023
+- name: Rebate is capped at the income tax liability (MCA 15-30-2191(2)(b))
+  absolute_error_margin: 1
+  period: 2021
   input:
-    filing_status: JOINT
-    state_code: AR
+    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:
+    # Lesser of $2,500 or the pre-credit liability, not the flat amount.
+    # (Montana's credit application already floors the applied credit, so
+    # this fixes the variable's reported value, not the tax outcome.)
+    mt_income_tax_rebate: 252.40
+
+- 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 rebate in 2022
+  period: 2022
+  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: 0

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

@@ -10,8 +10,24 @@ class mt_income_tax_rebate(Variable):
     reference = "https://archive.legmt.gov/bills/mca/title_0150/chapter_0300/part_0210/section_0910/0150-0300-0210-0910.html"
     defined_for = StateCode.MT
 
-    # The rebate is based on 2021 income tax liability, but provided in 2023
+    # The rebate is based on 2021 income tax liability, but provided in 2023.
+    # MCA 15-30-2191(2)(b): the rebate is the LESSER of the filing-status
+    # amount or the taxpayer's income tax liability, so it can not drive the
+    # liability negative. Montana elects the lower of the joint and
+    # separate-column computations, but that election
+    # (mt_files_separately) depends on post-credit liability and would
+    # create a computation cycle here, so cap at the smaller of the two
+    # pre-credit bases — never larger than the elected one.
     def formula(tax_unit, period, parameters):
         p = parameters(period).gov.states.mt.tax.income.credits.rebate
         filing_status = tax_unit("filing_status", period)
-        return p.amount[filing_status]
+        liability_indiv = add(
+            tax_unit,
+            period,
+            ["mt_income_tax_before_non_refundable_credits_indiv"],
+        )
+        liability_joint = tax_unit(
+            "mt_income_tax_before_non_refundable_credits_joint", period
+        )
+        liability = min_(liability_indiv, liability_joint)
+        return min_(p.amount[filing_status], max_(liability, 0))