Add Indiana supplemental homestead credit (SEA 1, 2025)

changelog.d/in-supplemental-homestead-credit.added.md

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+Add the Indiana supplemental homestead credit (Senate Enrolled Act 1, 2025), the lesser of 10% of homestead property tax or $300, from 2026.

policyengine_us/parameters/gov/states/household/state_property_tax_credits.yaml

@@ -172,6 +172,7 @@ values:
     - dc_senior_disabled_property_tax_relief
     - il_property_tax_credit
     - in_over_65_property_tax_credit
+    - in_supplemental_homestead_credit
     - ma_senior_circuit_breaker
     - me_property_tax_fairness_credit
     - mi_homestead_property_tax_credit

policyengine_us/parameters/gov/states/in/tax/property/supplemental_homestead_credit/cap.yaml

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+description: Indiana limits its supplemental homestead credit to this amount.
+values:
+  2026-01-01: 300
+metadata:
+  unit: currency-USD
+  period: year
+  label: Indiana supplemental homestead credit cap
+  reference:
+    - title: Senate Enrolled Act 1 (2025), SEC. 74 (page 124), adding IC 6-1.1-20.6-7.7(c)
+      href: https://iga.in.gov/pdf-documents/124/2025/senate/bills/SB0001/SB0001.05.ENRH.pdf#page=124
+    - title: Indiana Department of Local Government Finance | Legislation Affecting Deductions, Exemptions, and Credits
+      href: https://www.in.gov/dlgf/files/2025-memos/250612-Cockerill-Memo-Legislation-Affecting-Deductions%2C-Exemptions%2C-and-Credits.pdf#page=9

policyengine_us/parameters/gov/states/in/tax/property/supplemental_homestead_credit/rate.yaml

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+description: Indiana provides its supplemental homestead credit as this share of the homestead property tax liability.
+values:
+  2026-01-01: 0.1
+metadata:
+  unit: /1
+  period: year
+  label: Indiana supplemental homestead credit rate
+  reference:
+    - title: Senate Enrolled Act 1 (2025), SEC. 74 (page 124), adding IC 6-1.1-20.6-7.7(c)
+      href: https://iga.in.gov/pdf-documents/124/2025/senate/bills/SB0001/SB0001.05.ENRH.pdf#page=124
+    - title: Indiana Department of Local Government Finance | Legislation Affecting Deductions, Exemptions, and Credits
+      href: https://www.in.gov/dlgf/files/2025-memos/250612-Cockerill-Memo-Legislation-Affecting-Deductions%2C-Exemptions%2C-and-Credits.pdf#page=9

policyengine_us/tests/policy/baseline/gov/states/household/state_property_tax_credits/in_supplemental_homestead_credit_in_aggregate.yaml

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+# Guards that in_supplemental_homestead_credit flows through the
+# state_property_tax_credits umbrella (taxsim_state_property_tax_credit) from
+# 2026, stacking with the over-65 credit, and is excluded in 2025 by the
+# year-keyed list (the standalone variable has no in_effect gate, so only the
+# list protects earlier years).
+
+- name: 2026 umbrella stacks the supplemental homestead credit with the over-65 credit
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 66
+        real_estate_taxes: 2_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+        filing_status:
+          2024: SINGLE
+          2026: SINGLE
+        adjusted_gross_income:
+          2024: 30_000
+          2026: 30_000
+    households:
+      household:
+        members: [person1]
+        state_code: IN
+  output:
+    # Supplemental: 10% of 2,000 = 200. Over-65: $150 (senior, 2024 AGI 30,000
+    # under the limit, homeowner). Umbrella = 350.
+    in_supplemental_homestead_credit: 200
+    in_over_65_property_tax_credit: 150
+    taxsim_state_property_tax_credit: 350
+
+- name: 2025 umbrella excludes the supplemental homestead credit
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        real_estate_taxes: 2_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: IN
+  output:
+    # The credit is only in the 2026 list block, so the umbrella is 0 in 2025
+    # even though the standalone variable would extrapolate a nonzero value.
+    taxsim_state_property_tax_credit: 0

policyengine_us/tests/policy/baseline/gov/states/in/tax/property/supplemental_homestead_credit/in_supplemental_homestead_credit.yaml

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+# Indiana supplemental homestead credit (Senate Enrolled Act 1, 2025;
+# IC 6-1.1-20.6-7.7): the lesser of 10% of the homestead property tax liability
+# or $300, for taxes first due and payable in 2026 and after. No age or income
+# limit.
+
+- name: Case 1, 2026 homeowner below the cap receives 10% of property tax.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        real_estate_taxes: 2_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: IN
+  output:
+    in_supplemental_homestead_credit: 200
+
+- name: Case 2, 2026 homeowner at the $3,000 liability boundary receives the $300 cap.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        real_estate_taxes: 3_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: IN
+  output:
+    in_supplemental_homestead_credit: 300
+
+- name: Case 3, 2026 homeowner above the cap is limited to $300.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        real_estate_taxes: 5_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: IN
+  output:
+    in_supplemental_homestead_credit: 300
+
+- name: Case 4, 2026 renter with no real estate taxes receives no credit.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        real_estate_taxes: 0
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: IN
+  output:
+    in_supplemental_homestead_credit: 0
+
+- name: Case 5, 2026 non-Indiana homeowner receives no credit.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        real_estate_taxes: 2_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_code: MN
+  output:
+    in_supplemental_homestead_credit: 0
+
+- name: Case 6, 2026 multi-person tax unit is capped once per return.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        real_estate_taxes: 1_500
+      person2:
+        real_estate_taxes: 1_500
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    households:
+      household:
+        members: [person1, person2]
+        state_code: IN
+  output:
+    # 10% of the combined $3,000 is $300, exactly the cap, for the tax unit.
+    in_supplemental_homestead_credit: 300

policyengine_us/variables/gov/states/in/tax/property/supplemental_homestead_credit/in_supplemental_homestead_credit.py

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+from policyengine_us.model_api import *
+
+
+class in_supplemental_homestead_credit(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "Indiana supplemental homestead credit"
+    unit = USD
+    definition_period = YEAR
+    reference = (
+        "https://iga.in.gov/pdf-documents/124/2025/senate/bills/SB0001/SB0001.05.ENRH.pdf#page=124",
+        "https://www.in.gov/dlgf/files/2025-memos/250612-Cockerill-Memo-Legislation-Affecting-Deductions%2C-Exemptions%2C-and-Credits.pdf#page=9",
+    )
+    defined_for = StateCode.IN
+
+    def formula(tax_unit, period, parameters):
+        # Senate Enrolled Act 1 (2025) adds IC 6-1.1-20.6-7.7, a supplemental
+        # homestead credit equal to the lesser of 10% of the homestead property
+        # tax liability or $300, for taxes first due and payable in 2026 and
+        # after. No age or income limit; homeowners only, so renters (with no
+        # real estate taxes) receive zero.
+        # Modeling approximations, all bounded by the $300 cap: eligibility is
+        # proxied by real_estate_taxes > 0 rather than the IC 6-1.1-12-37
+        # homestead standard deduction qualification; the base is total
+        # real_estate_taxes rather than the homestead-only liability (PE has no
+        # homestead-specific variable); and subsection (d)'s exclusion of
+        # referendum-approved taxes from the base is not modeled.
+        p = (
+            parameters(period)
+            .gov.states["in"]
+            .tax.property.supplemental_homestead_credit
+        )
+        property_tax = add(tax_unit, period, ["real_estate_taxes"])
+        return min_(p.rate * property_tax, p.cap)