other dependent credit missing from iitax

[bodiyang]

Other dependent credit (odc) is missed from iitax calculation. As in iitax calculation in Tax-Calculator, child tax credit and additional child tax credit are included in the refund calculation, while other dependent credit is not.

This can be seen from the validation between Tax-Calculator and Taxsim 35

case record: taxsimid 30 year 2021. state 0. mstat 2 page 65 sage 72 depx 3 dep13 1 dep17 1 dep18 1 pwages 21,000 swages 1,000

iitax calculated by Tax-Calculator is $ -12734.3; by Taxsim is - $13414.3

My manual calculation from the 2021 form 1040is -13414.3

Tax-Calculator iitax function with the intermediate variable values: iitax $12734; c00100 $31000; c04800 $3200; taxbc $320; non_refundable_child_odep_credit $4000 ; c11070 $0; eitc $2734; c62100 $31000; amt_liability $0; iitax_before_credits_ex_AMT $320; recovery_rebate_credit $7000; c09200 $0; odc $1000; c07220 $2000; ctc_new $1000

Tax-Calculator calculation: refund = eitc ($2,734) + c11070 ($0) + c07220($2,000) + recovery_rebate_credit ($7,000) + ctc_new ($1,000) = $12,734 iitax = c09200 ($ 0) - refund($ 12,734) = $-12,734

It is supposed to be, taking consideration of odc: refund = eitc ($2,734) + c11070 ($0) + c07220($2,000) + recovery_rebate_credit ($7,000) + ctc_new ($1,000) + odc ($1,000) = $13,734 ~ match with line 33 of form 1040**

note: income tax liability calculated by taxsim should be 320 - 13734 = - 13414 ~ match with line 36 of form 1040

[bodiyang]

IMG_4945.jpg.zip

manual calculation of form 1040

[bodiyang]

solution: line 3313 in calcfunctions.py, ctc_refund = c07220 should be changed toctc_refund = c07220 + odc to take odc into consideration

note: As a reference, c09200 income tax liability after nonrefundable credit but before refundable credit calculation ~ line 3173 takes consideration of odc.

[bodiyang]

@jdebacker @MattHJensen I can open a PR on this if agree on this issue

[jdebacker]

@bodiyang I agree that there is an issue for the ODC in 2021 law, when it was a refundable credit.

To correct Tax-Calculator, I suggest that you create an ODC_refundable parameter (akin to the CTC_refundable parameter and with similar logic). The current law policy JSON file will set the default to this to false in all years except 2021.

The calcfunctions.py logic will be updated to include this boolean parameter in a way similar to how the refundable CTC is modeled, ultimately ending an odc_refund amount included in the refund calculation in calcfunctions.IITAX.

[bodiyang]

This issue will be solved in PR 2704

[jdebacker]

Resolved via PR #2704