Merge pull request #7686 from PolicyEngine/cdcc-fix-ne

Fix NE nonrefundable CDCC to use claimed federal credit

Author: PavelMakarchuk

changelog.d/cdcc-fix-ms.added.md

@@ -0,0 +1 @@
+Add ms_cdcc to state CDCC aggregation list so Mississippi's child and dependent care credit flows through to state_cdcc totals.

changelog.d/cdcc-fix-ne.fixed.md

@@ -0,0 +1 @@
+Fix Nebraska nonrefundable CDCC to use the actual claimed federal credit (`cdcc`) rather than the pre-liability-cap potential credit (`cdcc_potential`), consistent with Form 1040N instructions referencing Schedule 3 line 2.

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

@@ -19,6 +19,7 @@ values:
     - md_cdcc  # Maryland
     - me_child_care_credit  # Maine
     - mn_cdcc  # Minnesota
+    - ms_cdcc  # Mississippi
     - ne_cdcc_nonrefundable  # Nebraska
     - ne_cdcc_refundable  # Nebraska
     - nj_cdcc  # New Jersey

policyengine_us/tests/policy/baseline/gov/states/ne/tax/income/credits/cdcc/ne_cdcc_nonrefundable.yaml

@@ -2,7 +2,7 @@
   period: 2021
   input:
     adjusted_gross_income: 28_000
-    cdcc_potential: 2_000
+    cdcc: 2_000
     state_code: NE
   output:
     ne_cdcc_nonrefundable: 0
@@ -11,7 +11,7 @@
   period: 2022
   input:
     adjusted_gross_income: 30_000
-    cdcc_potential: 2_000
+    cdcc: 2_000
     state_code: NE
   output:
     ne_cdcc_nonrefundable: 2_000 * 0.25

policyengine_us/variables/gov/states/ne/tax/income/credits/cdcc/ne_cdcc_nonrefundable.py

@@ -18,7 +18,9 @@ def formula(tax_unit, period, parameters):
         # determine AGI eligibility
         eligible = ~tax_unit("ne_cdcc_refundable_eligible", period)
         # determine NE nonrefundable cdcc amount
-        # Nebraska matches the potential federal credit
-        us_cdcc = tax_unit("cdcc_potential", period)
+        # Nebraska references Schedule 3 line 2 (the actual claimed federal
+        # credit, limited by tax liability under IRC § 26), not the potential
+        # credit before the liability cap.
+        us_cdcc = tax_unit("cdcc", period)
         ne_cdcc = us_cdcc * p.cdcc.nonrefundable.fraction
         return eligible * ne_cdcc