Open martinholmer opened 1 month ago
@MaxGhenis curious your thoughts here - I do not think that this is a bug but more of a structural questions
We do compute a non refundable CTC amount of $1,875 which is then limited in the income_tax_capped_non_refundable_credits
- if included in the test above this variable returns a value of $1,060 - and this is ultimately the value that will affect the net income calculation
To get insights into the applicable CTC amount we also have the ctc_limiting_tax_liability
variable which also returns $1,060
However since Martin is raising this issue it might be worth discussing if this could be misleading for developers who are looking into individual non refundable credit computation files
@PavelMakarchuk said in issue #4800:
I do not think that this is a bug
I don't understand how you can say that when the non_refundable_ctc
variable is defined as "The portion of the Child Tax Credit that is not refundable."
That is an unambiguous definition of the variable. And the value of that variable is not always correct.
@PavelMakarchuk said in issue #4800:
I do not think that this is a bug
I don't understand how you can say that when the
non_refundable_ctc
variable is defined as "The portion of the Child Tax Credit that is not refundable."That is an unambiguous definition of the variable. And the value of that variable is not always correct.
Perhaps changing the variable name to maximum_non_refundable_ctc
would be more descriptive but this would lead to a structural change of naming all non refundable credit variables maximum_x
as we do not cap any non ref. credits at taxes until later in the computation tree
@PavelMakarchuk said in issue #4800:
Perhaps changing the variable name to
maximum_non_refundable_ctc
would be more descriptive but this would lead to a structural change of naming all non refundable credit variables maximum_x as we do not cap any [nonrefundable] credits at taxes until later in the computation tree.
How is a user of PolicyEngine-US supposed to get the ACTUAL non-refundable CTC amount?
We can do this for the federal non-refundable CTC, but in general we don't intend to track the sequence of non-refundable credits (as opposed to capping the sum at tax before credits) unless a use case arises.
@MaxGhenis said in issue #4800:
We can do this for the federal non-refundable CTC
Good! That will certainly help the developers working in the policyengine-taxsim
repository, who seem to be confused in the same way I was about the CTC variables.
The calculation of the federal non-refundable Child Tax Credit (CTC) is incorrect because in some cases it produces an amount that exceeds the income tax before credits amount. This, of course, is a bug by definition: a non-refundable credit can never exceed the income tax liability before credits.
Here is a simple test case that illustrates the problem: