Merge pull request #2784 from martinholmer/fix-amt-wrt-qbid

Correct AMT taxable income calculation to handle QBID correctly
PSLmodels · Jul 28, 2024 · d36d8db · d36d8db
2 parents 0b775e5 + 57b5e18
commit d36d8db
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diff --git a/taxcalc/calcfunctions.py b/taxcalc/calcfunctions.py
@@ -1906,7 +1906,7 @@ def AGIsurtax(c00100, MARS, AGI_surtax_trt, AGI_surtax_thd, taxbc, surtax):
 def AMT(e07300, dwks13, standard, f6251, c00100, c18300, taxbc,
         c04470, c17000, c20800, c21040, e24515, MARS, sep, dwks19,
         dwks14, c05700, e62900, e00700, dwks10, age_head, age_spouse,
-        earned, cmbtp,
+        earned, cmbtp, qbided,
         AMT_child_em_c_age, AMT_brk1,
         AMT_em, AMT_prt, AMT_rt1, AMT_rt2,
         AMT_child_em, AMT_em_ps, AMT_em_pe,
@@ -1943,7 +1943,7 @@ def AMT(e07300, dwks13, standard, f6251, c00100, c18300, taxbc,
     c20800: float
         Schedule A: net limited miscellaneous deductions deducted
     c21040: float
-        Itemized deductiosn that are phased out
+        Itemized deductions that are phased out
     e24515: float
         Schedule D: Un-Recaptured Section 1250 Gain
     MARS: int
@@ -1970,6 +1970,8 @@ def AMT(e07300, dwks13, standard, f6251, c00100, c18300, taxbc,
         Earned income for filing unit
     cmbtp: float
         Estimate of income on (AMT) Form 6251 but not in AGI
+    qbided: float
+        Qualified business income deduction
     AMT_child_em_c_age: float
         Age ceiling for special AMT exemption
     AMT_brk1: float
@@ -2021,11 +2023,11 @@ def AMT(e07300, dwks13, standard, f6251, c00100, c18300, taxbc,
     # pylint: disable=too-many-statements,too-many-branches
     # Form 6251, Part I
     if standard == 0.0:
-        c62100 = (c00100 - e00700 - c04470 +
+        c62100 = (c00100 - e00700 - qbided - c04470 +
                   max(0., min(c17000, 0.025 * c00100)) +
                   c18300 + c20800 - c21040)
     if standard > 0.0:
-        c62100 = c00100 - e00700
+        c62100 = c00100 - e00700 - qbided
     c62100 += cmbtp  # add income not in AGI but considered income for AMT
     if MARS == 3:
         amtsepadd = max(0.,

diff --git a/taxcalc/policy_current_law.json b/taxcalc/policy_current_law.json
@@ -14701,106 +14701,6 @@
                 "MARS": "widow",
                 "value": 1.0
             },
-            {
-                "year": 2014,
-                "MARS": "single",
-                "value": 1.0
-            },
-            {
-                "year": 2014,
-                "MARS": "mjoint",
-                "value": 1.0
-            },
-            {
-                "year": 2014,
-                "MARS": "mseparate",
-                "value": 1.0
-            },
-            {
-                "year": 2014,
-                "MARS": "headhh",
-                "value": 1.0
-            },
-            {
-                "year": 2014,
-                "MARS": "widow",
-                "value": 1.0
-            },
-            {
-                "year": 2015,
-                "MARS": "single",
-                "value": 1.0
-            },
-            {
-                "year": 2015,
-                "MARS": "mjoint",
-                "value": 1.0
-            },
-            {
-                "year": 2015,
-                "MARS": "mseparate",
-                "value": 1.0
-            },
-            {
-                "year": 2015,
-                "MARS": "headhh",
-                "value": 1.0
-            },
-            {
-                "year": 2015,
-                "MARS": "widow",
-                "value": 1.0
-            },
-            {
-                "year": 2016,
-                "MARS": "single",
-                "value": 1.0
-            },
-            {
-                "year": 2016,
-                "MARS": "mjoint",
-                "value": 1.0
-            },
-            {
-                "year": 2016,
-                "MARS": "mseparate",
-                "value": 1.0
-            },
-            {
-                "year": 2016,
-                "MARS": "headhh",
-                "value": 1.0
-            },
-            {
-                "year": 2016,
-                "MARS": "widow",
-                "value": 1.0
-            },
-            {
-                "year": 2017,
-                "MARS": "single",
-                "value": 1.0
-            },
-            {
-                "year": 2017,
-                "MARS": "mjoint",
-                "value": 1.0
-            },
-            {
-                "year": 2017,
-                "MARS": "mseparate",
-                "value": 1.0
-            },
-            {
-                "year": 2017,
-                "MARS": "headhh",
-                "value": 1.0
-            },
-            {
-                "year": 2017,
-                "MARS": "widow",
-                "value": 1.0
-            },
             {
                 "year": 2018,
                 "MARS": "single",
@@ -14826,31 +14726,6 @@
                 "MARS": "widow",
                 "value": 100000.0
             },
-            {
-                "year": 2019,
-                "MARS": "single",
-                "value": 50000.0
-            },
-            {
-                "year": 2019,
-                "MARS": "mjoint",
-                "value": 100000.0
-            },
-            {
-                "year": 2019,
-                "MARS": "mseparate",
-                "value": 50000.0
-            },
-            {
-                "year": 2019,
-                "MARS": "headhh",
-                "value": 50000.0
-            },
-            {
-                "year": 2019,
-                "MARS": "widow",
-                "value": 100000.0
-            },
             {
                 "year": 2026,
                 "MARS": "single",

diff --git a/taxcalc/tests/cpscsv_agg_expect.csv b/taxcalc/tests/cpscsv_agg_expect.csv
@@ -1,24 +1,24 @@
 ,2017,2018,2019,2020,2021,2022,2023,2024,2025,2026
 Returns (#m),187.1,199.2,201.9,204.5,207.1,209.7,212.3,214.9,217.5,220.1
 AGI ($b),9087.6,10714.8,11167.0,11573.2,13174.9,13543.8,14390.3,15077.5,15785.3,16457.7
-Itemizers (#m),62.8,24.0,25.1,27.5,31.2,31.2,29.8,29.4,30.4,81.1
-Itemized Deduction ($b),1218.6,613.4,656.3,746.7,863.7,883.2,888.9,915.0,964.2,2180.7
-Standard Deduction Filers (#m),124.3,175.3,176.8,176.8,175.7,178.4,182.4,185.4,187.1,139.1
-Standard Deduction ($b),1092.1,2949.5,3024.6,3079.1,3090.6,3229.8,3547.8,3805.0,3936.4,1613.3
+Itemizers (#m),62.8,23.9,25.0,27.5,31.2,31.2,29.8,29.4,30.4,81.1
+Itemized Deduction ($b),1218.6,612.0,655.1,745.4,862.7,881.9,887.6,913.8,963.1,2180.7
+Standard Deduction Filers (#m),124.3,175.3,176.9,176.9,175.8,178.5,182.5,185.5,187.2,139.1
+Standard Deduction ($b),1092.1,2951.3,3026.1,3080.8,3091.9,3231.4,3549.4,3806.5,3937.8,1613.3
 Personal Exemption ($b),1383.6,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,2081.6
-Taxable Income ($b),6230.6,7957.8,8321.4,8613.9,10048.2,10330.4,10946.5,11424.4,11988.0,11782.5
-Regular Tax ($b),1108.0,1379.8,1448.8,1497.1,1762.5,1837.0,1937.1,2016.1,2122.9,2339.6
-AMT Income ($b),8319.8,10261.9,10680.3,11016.8,12528.9,12879.7,13716.5,14379.0,15047.4,15074.1
-AMT Liability ($b),8.1,0.8,0.7,0.9,1.9,1.1,1.1,1.0,1.0,17.2
-AMT Filers (#m),2.6,0.2,0.2,0.2,0.3,0.2,0.2,0.2,0.2,4.1
-Tax before Credits ($b),1116.0,1380.6,1449.5,1498.0,1764.4,1838.1,1938.2,2017.1,2123.8,2356.8
+Taxable Income ($b),6230.6,7957.5,8321.1,8613.6,10047.9,10330.1,10946.2,11424.1,11987.7,11782.5
+Regular Tax ($b),1108.0,1379.7,1448.7,1497.0,1762.5,1837.0,1937.0,2016.0,2122.8,2339.6
+AMT Income ($b),8319.8,10210.9,10628.5,10963.9,12471.9,12819.7,13656.7,14316.6,14982.4,15074.1
+AMT Liability ($b),8.1,0.4,0.4,0.5,1.4,0.7,0.7,0.6,0.6,17.2
+AMT Filers (#m),2.6,0.1,0.1,0.1,0.2,0.1,0.1,0.1,0.1,4.1
+Tax before Credits ($b),1116.0,1380.1,1449.1,1497.6,1763.9,1837.6,1937.7,2016.6,2123.4,2356.8
 Refundable Credits ($b),70.8,102.5,102.7,655.0,827.1,98.5,106.4,111.6,112.1,97.7
 Nonrefundable Credits ($b),32.7,97.2,99.1,99.2,0.0,107.7,108.3,109.3,111.2,29.9
 Reform Surtaxes ($b),0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0
 Other Taxes ($b),5.5,10.7,11.3,12.6,13.9,14.4,16.5,17.6,18.8,19.9
-Ind Income Tax ($b),1018.1,1191.5,1259.0,756.4,951.1,1646.2,1740.0,1813.7,1919.2,2249.0
+Ind Income Tax ($b),1018.1,1191.1,1258.5,755.9,950.6,1645.8,1739.6,1813.3,1918.8,2249.0
 Payroll Taxes ($b),1040.8,1141.6,1194.9,1217.9,1318.7,1421.6,1506.7,1582.0,1656.7,1730.7
-Combined Liability ($b),2059.0,2333.1,2453.9,1974.3,2269.8,3067.8,3246.7,3395.7,3575.9,3979.7
+Combined Liability ($b),2059.0,2332.7,2453.4,1973.9,2269.3,3067.4,3246.2,3395.3,3575.5,3979.7
 With Income Tax <= 0 (#m),88.1,96.2,97.0,135.4,127.8,96.1,97.9,99.2,99.6,97.4
 With Combined Tax <= 0 (#m),62.8,65.4,66.4,98.2,97.7,67.9,69.3,70.5,71.3,70.7
 UBI Benefits ($b),0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0

diff --git a/taxcalc/tests/pufcsv_agg_expect.csv b/taxcalc/tests/pufcsv_agg_expect.csv
@@ -1,24 +1,24 @@
 ,2017,2018,2019,2020,2021,2022,2023,2024,2025,2026
 Returns (#m),190.9,194.3,197.3,200.1,202.9,205.6,208.4,211.2,214.0,216.8
 AGI ($b),11078.7,11816.6,12247.2,12722.3,14930.0,14973.9,15955.0,16597.5,17310.2,17852.5
-Itemizers (#m),45.7,19.5,20.1,21.1,22.7,22.9,21.7,21.2,21.3,51.9
-Itemized Deduction ($b),1274.3,605.3,636.4,694.6,764.2,784.9,789.0,808.3,834.6,2047.9
-Standard Deduction Filers (#m),145.2,174.7,177.1,178.4,179.5,182.7,186.7,189.9,192.6,164.8
-Standard Deduction ($b),1239.3,2862.1,2951.5,3023.0,3078.3,3231.2,3546.7,3807.7,3963.4,1856.2
+Itemizers (#m),45.7,19.4,20.0,21.0,22.6,22.8,21.6,21.1,21.2,51.9
+Itemized Deduction ($b),1274.3,602.7,633.9,692.3,761.9,782.7,786.5,805.6,831.9,2047.9
+Standard Deduction Filers (#m),145.2,174.8,177.2,178.5,179.6,182.8,186.8,190.0,192.8,164.8
+Standard Deduction ($b),1239.3,2865.3,2954.5,3025.8,3081.1,3234.0,3549.8,3811.2,3966.7,1856.2
 Personal Exemption ($b),1365.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,1959.2
-Taxable Income ($b),8112.2,9178.5,9519.7,9906.4,12002.2,11926.7,12691.5,13123.9,13696.5,13377.8
-Regular Tax ($b),1656.8,1712.2,1778.1,1838.2,2281.4,2282.6,2421.6,2488.0,2599.1,2792.6
-AMT Income ($b),10512.4,11427.2,11835.2,12265.2,14423.4,14452.5,15424.7,16049.3,16741.5,16934.0
-AMT Liability ($b),51.3,23.2,24.1,26.2,29.0,28.6,30.0,31.5,33.0,85.1
-AMT Filers (#m),5.7,0.6,0.6,0.6,0.7,0.6,0.6,0.6,0.6,7.4
-Tax before Credits ($b),1708.1,1735.4,1802.2,1864.4,2310.4,2311.2,2451.6,2519.4,2632.1,2877.6
+Taxable Income ($b),8112.2,9177.8,9519.0,9905.8,12001.6,11926.1,12690.7,13123.1,13695.7,13377.8
+Regular Tax ($b),1656.8,1712.0,1777.9,1838.0,2281.2,2282.4,2421.4,2487.7,2598.8,2792.6
+AMT Income ($b),10512.4,11342.1,11748.2,12178.7,14329.2,14354.5,15322.6,15942.9,16631.0,16934.0
+AMT Liability ($b),51.3,22.1,23.0,25.1,27.8,27.4,28.8,30.3,31.8,85.1
+AMT Filers (#m),5.7,0.2,0.2,0.3,0.4,0.3,0.3,0.3,0.3,7.4
+Tax before Credits ($b),1708.1,1734.1,1800.9,1863.1,2309.1,2309.8,2450.2,2518.0,2630.7,2877.6
 Refundable Credits ($b),102.9,117.5,118.5,642.0,802.6,119.2,127.1,133.0,135.2,121.9
 Nonrefundable Credits ($b),67.0,127.3,129.2,128.5,47.6,140.8,143.3,144.0,145.9,78.0
 Reform Surtaxes ($b),0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0
 Other Taxes ($b),40.0,44.8,43.6,52.9,84.9,61.5,66.5,65.2,66.0,64.2
-Ind Income Tax ($b),1578.2,1535.4,1598.1,1146.8,1545.0,2112.7,2247.8,2307.6,2417.0,2742.0
+Ind Income Tax ($b),1578.2,1534.1,1596.8,1145.5,1543.7,2111.3,2246.4,2306.2,2415.6,2742.0
 Payroll Taxes ($b),1083.8,1133.3,1185.4,1209.0,1306.0,1403.4,1489.3,1563.9,1637.9,1711.0
-Combined Liability ($b),2662.0,2668.7,2783.5,2355.8,2851.0,3516.1,3737.1,3871.6,4054.9,4452.9
+Combined Liability ($b),2662.0,2667.4,2782.2,2354.5,2849.7,3514.7,3735.6,3870.2,4053.5,4452.9
 With Income Tax <= 0 (#m),92.8,98.6,99.7,131.7,125.0,100.3,101.9,103.4,104.4,101.0
 With Combined Tax <= 0 (#m),63.4,65.6,66.8,102.1,94.5,68.9,70.2,71.6,72.6,72.4
 UBI Benefits ($b),0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0,0.0

diff --git a/taxcalc/tests/test_reforms.py b/taxcalc/tests/test_reforms.py
@@ -382,4 +382,4 @@ def test_ext_reform(tests_path):
     iitax_ext = calc_ext.array('iitax')
     rdiff = iitax_ext - iitax_end
     weighted_sum_rdiff = (rdiff * calc_end.array('s006')).sum() * 1.0e-9
-    assert np.allclose([weighted_sum_rdiff], [-224.46], rtol=0.0, atol=0.01)
+    assert np.allclose([weighted_sum_rdiff], [-224.91], rtol=0.0, atol=0.01)