Improve federal CDCC conformance with IRC § 21 (deemed income, qualifying-individual count, filing status)#8704
Draft
hua7450 wants to merge 2 commits into
Draft
Conversation
Codecov Report✅ All modified and coverable lines are covered by tests. Additional details and impacted files@@ Coverage Diff @@
## main #8704 +/- ##
=========================================
Coverage 100.00% 100.00%
=========================================
Files 5 8 +3
Lines 73 120 +47
Branches 0 1 +1
=========================================
+ Hits 73 120 +47
Flags with carried forward coverage won't be shown. Click here to find out more. ☔ View full report in Codecov by Harness. 🚀 New features to boost your workflow:
|
hua7450
changed the title
hua7450
changed the title
hua7450
force-pushed
the
cdcc-disabled-dependent-expenses
branch
from
9607204 to
cf3acf8
Compare
The Child and Dependent Care Credit drew care expenses only from tax_unit_childcare_expenses, which is child-scoped (children under 18). A disabled adult qualifying individual under IRC section 21 — a dependent or spouse age 18 or older — was therefore attributed $0 of care expenses and received a $0 credit (and $0 in state mirrors such as Kansas, where ks_cdcc is a share of the federal credit). Route adult dependent care through the existing care_expenses input (now year-defined) and add it to cdcc_relevant_expenses alongside childcare. The childcare and childcare-subsidy pipeline is left unchanged, so CCDF/state CCAP programs and the DC KCCATC are unaffected. Co-Authored-By: Claude Opus 4.8 (1M context) <noreply@anthropic.com>
Builds on the care_expenses expense fix: - Count a disabled spouse modeled as the tax-unit head, and treat a couple's two incapacitated spouses as one qualifying individual (IRC 21(b)(1)(C)), so cdcc_limit and the deemed floor are not double-counted. - Apply IRC section 21(d)(2) deemed earned income for a student or incapacitated spouse, so the earned-income test no longer zeroes the credit for a non-earning disabled spouse. - Disallow the credit for married taxpayers filing separately (IRC 21(e)(2)). Co-Authored-By: Claude Opus 4.8 (1M context) <noreply@anthropic.com>
hua7450
force-pushed
the
cdcc-disabled-dependent-expenses
branch
from
8208419 to
294902b
Compare
hua7450
changed the title
This file contains hidden or bidirectional Unicode text that may be interpreted or compiled differently than what appears below. To review, open the file in an editor that reveals hidden Unicode characters.
Learn more about bidirectional Unicode characters
Sign up for free
to join this conversation on GitHub.
Already have an account?
Sign in to comment
1 participant
Add this suggestion to a batch that can be applied as a single commit.This suggestion is invalid because no changes were made to the code.Suggestions cannot be applied while the pull request is closed.Suggestions cannot be applied while viewing a subset of changes.Only one suggestion per line can be applied in a batch.Add this suggestion to a batch that can be applied as a single commit.Applying suggestions on deleted lines is not supported.You must change the existing code in this line in order to create a valid suggestion.Outdated suggestions cannot be applied.This suggestion has been applied or marked resolved.Suggestions cannot be applied from pending reviews.Suggestions cannot be applied on multi-line comments.Suggestions cannot be applied while the pull request is queued to merge.Suggestion cannot be applied right now. Please check back later.
Summary
Improves federal CDCC conformance with IRC § 21, building on the expense fix in #8746 (which lets a disabled adult's care expenses reach the credit base via the new
care_expensesinput). This PR adds the eligibility, count, earned-income, and filing-status rules — most importantly, the rule that makes the credit actually pay out for a disabled non-earning spouse.Changes
1. Qualifying individual —
is_cdcc_eligible/count_cdcc_eligible(§ 21(b)(1)). The disability prong now covers a disabled spouse, including one the model assigns as the tax-unit head; the age prong requires dependency. A couple's two incapacitated spouses count as one qualifying individual (§ 21(b)(1)(C): the taxpayer is never their own), so the $3,000/$6,000 cap and the deemed floor aren't double-counted.2. Deemed earned income — § 21(d)(2). A spouse who is a full-time student or incapable of self-care is deemed to earn $250/mo (one qualifying individual) or $500/mo (two or more), applied to only one spouse (Treas. Reg. § 1.21-2(b)(4), Example 3). Without it, a non-earning disabled spouse fails the earned-income test and the credit is $0. New
deemed_earned_incomeparameter,cdcc_income_floor_eligiblevariable, and rewrittenmin_head_spouse_earned.3. Married filing separately — § 21(e)(2). The credit now returns $0 for
SEPARATEfilers. A separated taxpayer who qualifies under § 21(e)(4) is treated as not married and files as head of household, so they are not excluded.Reproductions (TY 2024)
How it composes with #8746
The "two incapacitated spouses" integration case is the proof the two PRs fit together: the care expense reaches the base via
care_expenses(#8746), and the count cap + § 21(d)(2) deemed income (this PR) let it survive the caps → $600.Tests
Edge-case unit tests (
is_cdcc_eligible,count_cdcc_eligible,cdcc_income_floor_eligible,min_head_spouse_earned, MFS incdcc.yaml) and the federal integration case. 29 pass locally; CI runs the full suite.🤖 Generated with Claude Code