Revert #8911: restore OK retirement exclusion for IRC 401 employer pensions in 2021

changelog.d/fixed/9009.md

@@ -0,0 +1 @@
+- Restored the Oklahoma $10,000 retirement exclusion for IRC section 401 employer pensions in 2021; the 2021 Schedule 511-A line 6 instructions list section 401 plans as a qualifying source (reverts #8911).

policyengine_us/tests/policy/baseline/gov/states/ok/tax/income/integration.yaml

@@ -347,3 +347,30 @@
     ok_standard_deduction: 12_700
     # Sales tax credit: 4 exemptions * $40 = $160 (has dependents, under $50k)
     ok_stc: 160
+- name: OK 2021 joint couple with private (IRC 401) employer pensions each claim the 10k other-retirement exclusion (taxsim 1083)
+  period: 2021
+  absolute_error_margin: 2
+  input:
+    people:
+      head:
+        age: 65
+        taxable_private_pension_income: 19_228.76
+        taxable_interest_income: 21_716.92
+        social_security_retirement: 12_472.44
+      spouse:
+        age: 68
+        taxable_private_pension_income: 19_228.76
+        taxable_interest_income: 21_716.92
+        social_security_retirement: 12_472.44
+    tax_units:
+      tax_unit:
+        members: [head, spouse]
+    households:
+      household:
+        members: [head, spouse]
+        state_code: OK
+  output:
+    adjusted_gross_income: 103_095
+    ok_pension_subtraction: 20_000
+    ok_agi: 61_891
+    ok_income_tax: 2_005

policyengine_us/tests/policy/baseline/gov/states/ok/tax/income/ok_pension_subtraction.yaml

@@ -225,83 +225,3 @@
     # Person2: $45,000 pension, capped at $10,000
     # Total: $10,000 + $10,000 = $20,000
     ok_pension_subtraction: 20_000
-
-# Issue #8830: private employer (IRC 401) pensions were not a qualifying
-# Schedule 511-A line 6 source until tax year 2022.
-- name: OK pension subtraction - 2021 - private (IRC 401) pension does not qualify
-  absolute_error_margin: 0.01
-  period: 2021
-  input:
-    people:
-      person1:
-        is_tax_unit_head: true
-        age: 66
-        # Private employer (IRC 401) pension only; not a qualifying source in 2021
-        taxable_private_pension_income: 20_000
-    spm_units:
-      spm_unit:
-        members: [person1]
-        snap: 0
-        tanf: 0
-    tax_units:
-      tax_unit:
-        members: [person1]
-        aca_ptc: 0
-    households:
-      household:
-        members: [person1]
-        state_code: OK
-  output:
-    ok_pension_subtraction: 0
-
-- name: OK pension subtraction - 2022 - private (IRC 401) pension now qualifies
-  absolute_error_margin: 0.01
-  period: 2022
-  input:
-    people:
-      person1:
-        is_tax_unit_head: true
-        age: 66
-        taxable_private_pension_income: 20_000
-    spm_units:
-      spm_unit:
-        members: [person1]
-        snap: 0
-        tanf: 0
-    tax_units:
-      tax_unit:
-        members: [person1]
-        aca_ptc: 0
-    households:
-      household:
-        members: [person1]
-        state_code: OK
-  output:
-    # Private pension is a qualifying source from 2022, capped at $10,000
-    ok_pension_subtraction: 10_000
-
-- name: OK pension subtraction - 2021 - government pension still qualifies
-  absolute_error_margin: 0.01
-  period: 2021
-  input:
-    people:
-      person1:
-        is_tax_unit_head: true
-        age: 66
-        # Government (non-private) pension remained a qualifying source in 2021
-        taxable_public_pension_income: 8_000
-    spm_units:
-      spm_unit:
-        members: [person1]
-        snap: 0
-        tanf: 0
-    tax_units:
-      tax_unit:
-        members: [person1]
-        aca_ptc: 0
-    households:
-      household:
-        members: [person1]
-        state_code: OK
-  output:
-    ok_pension_subtraction: 8_000

policyengine_us/variables/gov/states/ok/tax/income/subtractions/ok_pension_subtraction.py

@@ -33,17 +33,6 @@ def formula(tax_unit, period, parameters):
         # Get pension income for each person in the tax unit
         pensions = tax_unit.members("taxable_pension_income", period)
         p = parameters(period).gov.states.ok.tax.income.agi.subtractions
-        # Before tax year 2022, private employer (IRC section 401) pensions
-        # were not a qualifying source on Schedule 511-A, line 6 (Other
-        # Retirement Income); Oklahoma added IRC section 401 employer plans
-        # starting in 2022. Exclude private pension income from the
-        # subtraction base before then.
-        private_pensions = tax_unit.members("taxable_private_pension_income", period)
-        qualifying_pensions = where(
-            p.private_pension_qualifies,
-            pensions,
-            max_(0, pensions - private_pensions),
-        )
         # Each person can subtract up to the pension limit
         # Sum across all tax unit members
-        return tax_unit.sum(min_(p.pension_limit, qualifying_pensions))
+        return tax_unit.sum(min_(p.pension_limit, pensions))