Add Streamlined EITC and CTC Linear Phase-Out reforms

changelog_entry.yaml

@@ -0,0 +1,5 @@
+- bump: minor
+  changes:
+    added:
+      - Add Streamlined EITC reform with filing status dimension for max credit
+      - Add CTC Linear Phase-Out reform for complete phase-out between thresholds

policyengine_us/parameters/gov/contrib/ctc/linear_phase_out/end.yaml

@@ -0,0 +1,19 @@
+description: The CTC fully phases out at this income, by filing status.
+
+SINGLE:
+  2020-01-01: 240_000
+JOINT:
+  2020-01-01: 440_000
+SEPARATE:
+  2020-01-01: 175_000
+HEAD_OF_HOUSEHOLD:
+  2020-01-01: 240_000
+SURVIVING_SPOUSE:
+  2020-01-01: 440_000
+
+metadata:
+  unit: currency-USD
+  period: year
+  label: CTC full phase-out income
+  breakdown:
+    - filing_status

policyengine_us/parameters/gov/contrib/ctc/linear_phase_out/in_effect.yaml

@@ -0,0 +1,9 @@
+description: The CTC linear phase-out reform is in effect if this is true.
+
+values:
+  2020-01-01: false
+
+metadata:
+  unit: bool
+  period: year
+  label: CTC linear phase-out in effect

policyengine_us/parameters/gov/contrib/streamlined_eitc/in_effect.yaml

@@ -0,0 +1,9 @@
+description: The streamlined EITC reform is in effect if this is true.
+
+values:
+  2020-01-01: false
+
+metadata:
+  unit: bool
+  period: year
+  label: Streamlined EITC in effect

policyengine_us/parameters/gov/contrib/streamlined_eitc/max/joint.yaml

@@ -0,0 +1,18 @@
+description: The EITC is capped at this amount for joint filers, based on number of children.
+
+brackets:
+  - threshold:
+      2020-01-01: 0
+    amount:
+      2020-01-01: 0
+  - threshold:
+      2020-01-01: 1
+    amount:
+      2020-01-01: 4_993
+
+metadata:
+  type: single_amount
+  period: year
+  threshold_unit: child
+  amount_unit: currency-USD
+  label: Streamlined EITC maximum (joint filers)

policyengine_us/parameters/gov/contrib/streamlined_eitc/max/single.yaml

@@ -0,0 +1,18 @@
+description: The EITC is capped at this amount for single and head of household filers, based on number of children.
+
+brackets:
+  - threshold:
+      2020-01-01: 0
+    amount:
+      2020-01-01: 0
+  - threshold:
+      2020-01-01: 1
+    amount:
+      2020-01-01: 3_995
+
+metadata:
+  type: single_amount
+  threshold_unit: child
+  amount_unit: currency-USD
+  label: Streamlined EITC maximum (single/HOH filers)
+  period: year

policyengine_us/reforms/ctc/__init__.py

@@ -13,3 +13,6 @@
 from .ctc_minimum_refundable_amount import (
     create_ctc_minimum_refundable_amount_reform,
 )
+from .ctc_linear_phase_out import (
+    create_ctc_linear_phase_out_reform,
+)

policyengine_us/reforms/ctc/ctc_linear_phase_out.py

@@ -0,0 +1,88 @@
+from policyengine_us.model_api import *
+from policyengine_core.periods import period as period_
+
+
+def create_ctc_linear_phase_out() -> Reform:
+    """
+    CTC Linear Phase-Out Reform:
+    - Replaces the standard CTC phase-out with a linear phase-out
+    - Uses existing IRS threshold for phase-out start
+    - Adds new parameter for phase-out end threshold by filing status
+
+    To model full Enhanced CTC policy:
+    - Use this reform for linear phase-out
+    - Use ctc_minimum_refundable_amount reform for minimum refundability
+    - Set existing IRS parameters for credit amounts and phase-in rates
+
+    This reform adds:
+    - gov.contrib.ctc.linear_phase_out.in_effect (reform switch)
+    - gov.contrib.ctc.linear_phase_out.end (full phase-out by filing status)
+    """
+
+    class ctc_phase_out(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "CTC reduction from income"
+        unit = USD
+        documentation = (
+            "Reduction of the total CTC due to income with linear phase-out."
+        )
+        definition_period = YEAR
+
+        def formula(tax_unit, period, parameters):
+            # Linear phase-out between threshold and end
+            p = parameters(period).gov.contrib.ctc.linear_phase_out
+            ctc_irs = parameters(period).gov.irs.credits.ctc
+            filing_status = tax_unit("filing_status", period)
+            income = tax_unit("adjusted_gross_income", period)
+
+            # Use existing IRS threshold for phase-out start
+            phase_out_threshold = ctc_irs.phase_out.threshold[filing_status]
+            # Use new parameter for phase-out end
+            phase_out_end = p.end[filing_status]
+
+            # Calculate the maximum CTC for the tax unit
+            ctc_maximum = tax_unit("ctc_maximum_with_arpa_addition", period)
+
+            # Calculate phase-out as linear reduction
+            phase_out_range = max_(1, phase_out_end - phase_out_threshold)
+            excess_income = max_(0, income - phase_out_threshold)
+
+            # Phase-out rate = ctc_maximum / phase_out_range
+            phase_out_rate = ctc_maximum / phase_out_range
+            reduction = excess_income * phase_out_rate
+            return min_(reduction, ctc_maximum)
+
+    class reform(Reform):
+        def apply(self):
+            self.update_variable(ctc_phase_out)
+
+    return reform
+
+
+def create_ctc_linear_phase_out_reform(
+    parameters, period, bypass: bool = False
+):
+    if bypass:
+        return create_ctc_linear_phase_out()
+
+    p = parameters.gov.contrib.ctc.linear_phase_out
+
+    reform_active = False
+    current_period = period_(period)
+
+    for i in range(5):
+        if p(current_period).in_effect:
+            reform_active = True
+            break
+        current_period = current_period.offset(1, "year")
+
+    if reform_active:
+        return create_ctc_linear_phase_out()
+    else:
+        return None
+
+
+ctc_linear_phase_out = create_ctc_linear_phase_out_reform(
+    None, None, bypass=True
+)

policyengine_us/reforms/eitc/__init__.py

@@ -1,3 +1,6 @@
 from .halve_joint_eitc_phase_out_rate import (
     create_halve_joint_eitc_phase_out_rate_reform,
 )
+from .streamlined_eitc import (
+    create_streamlined_eitc_reform,
+)

policyengine_us/reforms/eitc/streamlined_eitc.py

@@ -0,0 +1,69 @@
+from policyengine_us.model_api import *
+from policyengine_core.periods import period as period_
+
+
+def create_streamlined_eitc() -> Reform:
+    """
+    Streamlined EITC Reform:
+    - Single schedule for all filers with dependent children (1+ children)
+    - Maximum credit varies by filing status: single vs married
+
+    To model the full policy, set these existing IRS parameters:
+    - gov.irs.credits.eitc.phase_in_rate
+    - gov.irs.credits.eitc.phase_out.start (phase-out start for single)
+    - gov.irs.credits.eitc.phase_out.joint_bonus (additional amount for married)
+    - gov.irs.credits.eitc.phase_out.rate (phase-out rate)
+
+    This reform adds:
+    - gov.contrib.streamlined_eitc.max.single (max credit for single/HOH)
+    - gov.contrib.streamlined_eitc.max.joint (max credit for married filing jointly)
+    """
+
+    class eitc_maximum(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "Maximum EITC"
+        definition_period = YEAR
+        reference = "https://www.law.cornell.edu/uscode/text/26/32#a"
+        unit = USD
+
+        def formula(tax_unit, period, parameters):
+            child_count = tax_unit("eitc_child_count", period)
+            p = parameters(period).gov.contrib.streamlined_eitc
+            filing_status = tax_unit("filing_status", period)
+            joint = filing_status == filing_status.possible_values.JOINT
+            return where(
+                joint,
+                p.max.joint.calc(child_count),
+                p.max.single.calc(child_count),
+            )
+
+    class reform(Reform):
+        def apply(self):
+            self.update_variable(eitc_maximum)
+
+    return reform
+
+
+def create_streamlined_eitc_reform(parameters, period, bypass: bool = False):
+    if bypass:
+        return create_streamlined_eitc()
+
+    p = parameters.gov.contrib.streamlined_eitc
+
+    reform_active = False
+    current_period = period_(period)
+
+    for i in range(5):
+        if p(current_period).in_effect:
+            reform_active = True
+            break
+        current_period = current_period.offset(1, "year")
+
+    if reform_active:
+        return create_streamlined_eitc()
+    else:
+        return None
+
+
+streamlined_eitc = create_streamlined_eitc_reform(None, None, bypass=True)

policyengine_us/reforms/reforms.py

@@ -19,6 +19,7 @@
 )
 from .biden.budget_2025 import create_capital_gains_tax_increase_reform
 from .eitc import create_halve_joint_eitc_phase_out_rate_reform
+from .eitc import create_streamlined_eitc_reform
 from .states.ny.wftc import create_ny_working_families_tax_credit_reform
 from .harris.lift.middle_class_tax_credit import (
     create_middle_class_tax_credit_reform,
@@ -65,6 +66,7 @@
     create_ctc_per_child_phase_in_reform,
     create_ctc_per_child_phase_out_reform,
     create_ctc_minimum_refundable_amount_reform,
+    create_ctc_linear_phase_out_reform,
 )
 from .snap import (
     create_abolish_snap_deductions_reform,
@@ -298,6 +300,10 @@ def create_structural_reforms_from_parameters(parameters, period):
     aca_ptc_700_fpl_cliff = create_aca_ptc_700_fpl_cliff_reform(
         parameters, period
     )
+    streamlined_eitc = create_streamlined_eitc_reform(parameters, period)
+    ctc_linear_phase_out = create_ctc_linear_phase_out_reform(
+        parameters, period
+    )
 
     reforms = [
         afa_reform,
@@ -358,6 +364,8 @@ def create_structural_reforms_from_parameters(parameters, period):
         aca_ptc_additional_bracket,
         aca_ptc_simplified_bracket,
         aca_ptc_700_fpl_cliff,
+        streamlined_eitc,
+        ctc_linear_phase_out,
     ]
     reforms = tuple(filter(lambda x: x is not None, reforms))