Fix Missouri 2021 HoH exemption start date and federal income tax deduction base#9095
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…uction base The $1,400 head of household additional exemption (RSMo 143.161(2)) first appeared on the MO-1040 as Line 15 in 2022; the 2018-2021 forms had no line for it. Start the parameter in 2022 instead of 2021. The MO-1040 Line 9 worksheet bases the federal income tax deduction on 1040 Line 22, which refundable credits never reduce. Add refundable_ctc (all years) and the 2021 refundable CDCC to the ignored-credits add-back list so the base no longer nets them out. Fixes PolicyEngine#9093 Fixes PolicyEngine#9094 Co-Authored-By: Claude Fable 5 <noreply@anthropic.com>
… behavior The taxsimid 77665 expectation came from patched TAXSIM35, which nets the refundable 2021 CTC out of the federal income tax deduction base contrary to the MO-1040 Line 9 worksheet. The 50k single-parent scenario expected the head of household exemption in 2021, a year before MO-1040 Line 15 existed; its taxable income now matches the recorded taxsim output. Co-Authored-By: Claude Fable 5 <noreply@anthropic.com>
DTrim99
marked this pull request as ready for review
July 20, 2026 19:50
hua7450
approved these changes
Jul 20, 2026
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Fixes #9093
Fixes #9094
Surfaced by PolicyEngine/policyengine-taxsim#1104 (MO 2021 HoH, $70,512.51 wages, one child): PolicyEngine's MO taxable income was $49,874 vs $50,833 on the filed MO-1040.
Changes
1. Head of household $1,400 additional exemption starts in 2022, not 2021 (
exemptions/head_of_household.yaml). RSMo 143.161(2) provides the exemption, but the Department of Revenue offered no line for it on the 2018–2021 forms — on the 2021 MO-1040, Line 15 is the long-term care insurance deduction, and "$1,400" appears nowhere in the 2021 booklet. The exemption (re)appeared as Line 15 on the 2022 form. Values are now0000-01-01: 0,2022-01-01: 1_400(pre-2018 history, when it was also claimable, stays out of scope).2. Refundable CTC (all years) and the 2021 refundable CDCC no longer reduce the federal income tax deduction base (
deductions/federal_income_tax/ignored_credits.yaml). The MO-1040 Line 9 worksheet defines the base as 1040 Line 22 less Lines 27/29, Schedule 2 Part I Line 3, and Schedule 3 Line 9 — credits on Line 28 (refundable CTC/ACTC), Line 30 (recovery rebate), and Schedule 3 Line 13g (2021 refundable CDCC) never touch Line 22.cdccis added for 2021 only, the year it is ingov.irs.credits.refundable; adding it back in other years would overstate the base.Not changed:
eitcremains in the ignored list even though the worksheet subtracts the EIC ("Line 22 less Line 27a") — flagged as an open question in #9094.Validation
Against the #1104 record (2021, HoH, $70,512.51 wages, one child age 10):
Residual ~$9 of taxable income traces to the TaxAct federal return showing $8 of taxable interest despite no interest input, plus wage rounding.
Tests: flipped the 2021 HoH-exemption test to 0, added deduction unit tests for the refundable CTC and 2021 CDCC add-backs, and added the #1104 record as a taxsim integration test. All 21 MO tests in the touched files pass locally.
🤖 Generated with Claude Code