Puerto Rico Earned Income Credit

changelog_entry.yaml

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+- bump: minor
+  changes:
+    added:
+    - Puerto Rico earned income credit.

policyengine_us/parameters/gov/territories/pr/tax/income/credits/earned_income/eligibility/max.yaml

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+description: Puerto Rico limits EITC eligibility to filers below or equal to this age.
+values:
+  2023-01-01: 65
+metadata:
+  unit: year
+  label: EITC maximum age
+  reference:
+    - title: Schedule CT Individual, Earned Income Credit, 2023
+      href: https://hacienda.pr.gov/sites/default/files/schedule_ct_rev._jul_5_23_informative_-_instructions.pdf#page=1

policyengine_us/parameters/gov/territories/pr/tax/income/credits/earned_income/eligibility/min.yaml

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+description: Puerto Rico limits EITC eligibility to people of this age or older.
+values:
+  2023-01-01: 19
+metadata:
+  unit: year
+  label: EITC minimum age
+  reference:
+    - title: Schedule CT Individual, Earned Income Credit, 2023
+      href: https://hacienda.pr.gov/sites/default/files/schedule_ct_rev._jul_5_23_informative_-_instructions.pdf#page=1

policyengine_us/parameters/gov/territories/pr/tax/income/credits/earned_income/investment_income/limit.yaml

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+description: Puerto Rico limits the earned income credit to filers with investment income below this threshold. 
+values: 
+  2010-12-31: 2_200 
+metadata:
+  unit: currency-USD
+  label: Puerto Rico earned income credit investment income limit
+  period: year
+  reference:
+    - title: P.R. Laws tit. 13, § 30211 (e)
+      href: https://casetext.com/statute/laws-of-puerto-rico/title-thirteen-taxation-and-finance/subtitle-17-internal-revenue-code-of-2011/part-ii-income-taxes/chapter-1007-credits-against-tax/subchapter-b-refundable-credits/30211-earned-income-credit
+    - title: P.R. Anejo CT Individuo
+      href: https://hacienda.pr.gov/sites/default/files/anejo_ct_rev._15_may_23_informativo_-_instrucciones.pdf

policyengine_us/parameters/gov/territories/pr/tax/income/credits/earned_income/investment_income/sources.yaml

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+description: Puerto Rico accounts for the following investment income sources, under the earned income tax credit. 
+values:
+  2010-12-31: 
+  - interest_income
+  - dividend_income
+  - rental_income
+  - capital_gains
+  - child_support_received
+metadata:
+  unit: list
+  period: year
+  label: Puerto Rico earned income credit investment income sources
+  reference:
+    - title: P.R. Laws tit. 13, § 30211 (e)
+      href: https://casetext.com/statute/laws-of-puerto-rico/title-thirteen-taxation-and-finance/subtitle-17-internal-revenue-code-of-2011/part-ii-income-taxes/chapter-1007-credits-against-tax/subchapter-b-refundable-credits/30211-earned-income-credit
+    - title: P.R. Anejo CT Individuo
+      href: https://hacienda.pr.gov/sites/default/files/anejo_ct_rev._15_may_23_informativo_-_instrucciones.pdf

policyengine_us/parameters/gov/territories/pr/tax/income/credits/earned_income/max_amount.yaml

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+description: Puerto Rico provides this maximum earned income credit.
+brackets:
+  - threshold: 
+      2010-12-31: 0
+    amount:
+      2010-12-31: 1656
+  - threshold: 
+      2010-12-31: 1
+    amount:
+      2010-12-31: 3864
+  - threshold: 
+      2010-12-31: 2
+    amount:
+      2010-12-31: 6072
+  - threshold: 
+      2010-12-31: 3
+    amount:
+      2010-12-31: 7173
+
+metadata:
+  threshold_unit: child
+  amount_unit: currency-USD
+  label: Puerto Rico earned income credit max amount
+  period: year
+  reference:
+    - title: P.R. Laws tit. 13, § 30211 (1)-(6)
+      href: https://casetext.com/statute/laws-of-puerto-rico/title-thirteen-taxation-and-finance/subtitle-17-internal-revenue-code-of-2011/part-ii-income-taxes/chapter-1007-credits-against-tax/subchapter-b-refundable-credits/30211-earned-income-credit
+    - title: P.R. Anejo CT Individuo
+      href: https://hacienda.pr.gov/sites/default/files/anejo_ct_rev._15_may_23_informativo_-_instrucciones.pdf

policyengine_us/parameters/gov/territories/pr/tax/income/credits/earned_income/phase_in_rate.yaml

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+description: Puerto Rico phases the earned income credit in at this rate of state gross income.
+brackets:
+  # 0 children
+  - threshold: 
+      2010-12-31: 0
+    rate:
+      2010-12-31: 0
+  # 1 child
+  - threshold: 
+      2010-12-31: 1
+    rate:
+      2010-12-31: 0.02
+  # 2 children
+  - threshold: 
+      2010-12-31: 2
+    rate:
+      2010-12-31: 0
+  # 3 children
+  - threshold: 
+      2010-12-31: 3
+    rate:
+      2010-12-31: 0
+values: 
+  2010-12-31: 0.035
+  2011-12-31: 0.04
+  2012-12-31: 0.045
+  2013-12-31: 0.05
+  2014-12-31: 0.055
+  2015-12-31: 0.06
+
+metadata:
+  rate_unit: /1
+  threshold_unit: 
+  type_marginal: marginal_rate
+  label: Puerto Rico earned income credit phase in rate
+  period: year
+  reference:
+    - title: P.R. Laws tit. 13, § 30211 (1)-(6)
+      href: https://casetext.com/statute/laws-of-puerto-rico/title-thirteen-taxation-and-finance/subtitle-17-internal-revenue-code-of-2011/part-ii-income-taxes/chapter-1007-credits-against-tax/subchapter-b-refundable-credits/30211-earned-income-credit
+    - title: P.R. Anejo CT Individuo
+      href: https://hacienda.pr.gov/sites/default/files/anejo_ct_rev._15_may_23_informativo_-_instrucciones.pdf

policyengine_us/parameters/gov/territories/pr/tax/income/credits/earned_income/phase_out_rate.yaml

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+description: Puerto Rico phases the earned income credit out at this rate of state gross income.
+brackets:
+  # if below the threshold, no phase out
+  - threshold: 
+      2010-12-31: 0
+    rate:
+      2010-12-31: 0
+  # if in the middle bracket, phase out percentage which subtracts from phase in part
+  - threshold: 
+      2010-12-31: 10_000
+    rate:
+      2010-12-31: 0.02
+  # no percentage rate for any amount of income above upper limit
+  - threshold: 
+      2010-12-31: 22_500
+      2011-12-31: 25_000
+      2012-12-31: 27_500
+      2013-12-31: 30_000
+      2014-12-31: 32_500
+      2015-12-31: 35_000
+    rate:
+      2010-12-31: 0
+metadata:
+  rate_unit: /1
+  threshold_unit: currency-USD
+  type_marginal: marginal_rate
+  label: Puerto Rico earned income credit phase out rate
+  period: year
+  reference:
+    - title: P.R. Laws tit. 13, § 30211 (1)-(6)
+      href: https://casetext.com/statute/laws-of-puerto-rico/title-thirteen-taxation-and-finance/subtitle-17-internal-revenue-code-of-2011/part-ii-income-taxes/chapter-1007-credits-against-tax/subchapter-b-refundable-credits/30211-earned-income-credit
+    - title: P.R. Anejo CT Individuo
+      href: https://hacienda.pr.gov/sites/default/files/anejo_ct_rev._15_may_23_informativo_-_instrucciones.pdf

policyengine_us/parameters/gov/territories/pr/tax/income/credits/refundable.yaml

@@ -12,3 +12,4 @@ values:
   2021-01-01:
     - pr_low_income_credit
     - pr_compensatory_low_income_credit
+    - pr_earned_income_credit

policyengine_us/tests/policy/baseline/gov/territories/pr/tax/income/credits/earned_income/pr_earned_income_credit.yaml

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+- name: Not eligible person, 2024
+  period: 2024
+  input:
+    pr_gross_income_person: 10_000
+    pr_earned_income_credit_eligible: false
+  output:
+    pr_earned_income_credit: 0
+
+- name: Eligible person in the highest bracket, 2024
+  period: 2024
+  input:
+    pr_gross_income_person: 35_000
+    pr_earned_income_credit_eligible: true
+  output:
+    pr_earned_income_credit: 100
+
+- name: Eligible person in the middle bracket, 2024
+  period: 2024
+  input:
+    pr_gross_income_person: 34_000
+    pr_earned_income_credit_eligible: true
+  output:
+    pr_earned_income_credit: 120
+
+- name: Eligible person with max credit, 2024
+  period: 2024
+  input:
+    pr_gross_income_person: 10_000
+    pr_earned_income_credit_eligible: true
+  output:
+    pr_earned_income_credit: 600
+
+- name: Eligible person in the lower bracket, 2024
+  period: 2024
+  input:
+    pr_gross_income_person: 8_000
+    pr_earned_income_credit_eligible: true
+  output:
+    pr_earned_income_credit: 480
+
+- name: Eligible person in the lower bracket, 2011
+  period: 2011
+  input:
+    pr_gross_income_person: 8_000
+    pr_earned_income_credit_eligible: true
+  output:
+    pr_earned_income_credit: 280

policyengine_us/tests/policy/baseline/gov/territories/pr/tax/income/credits/earned_income/pr_earned_income_credit_eligible.yaml

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+- name: Dependent
+  period: 2024
+  input:
+    is_tax_unit_head_or_spouse: false
+    pr_earned_income_credit_investment_income: 2_000
+  output:
+    pr_earned_income_credit_eligible: false
+
+- name: Investment income over the limit
+  period: 2024
+  input:
+    is_tax_unit_head_or_spouse: true
+    pr_earned_income_credit_investment_income: 2_201
+  output:
+    pr_earned_income_credit_eligible: false
+
+- name: Eligible person
+  period: 2024
+  input:
+    is_tax_unit_head_or_spouse: true
+    pr_earned_income_credit_investment_income: 2_200
+  output:
+    pr_earned_income_credit_eligible: true

policyengine_us/variables/gov/territories/pr/tax/income/credits/earned_income/pr_earned_income_child_count.py

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+from policyengine_us.model_api import *
+
+
+class pr_earned_income_child_count(Variable):
+    value_type = int
+    entity = TaxUnit
+    label = "EITC-qualifying children"
+    definition_period = YEAR
+    reference = 
+
+    adds = ["is_child_dependent"]

policyengine_us/variables/gov/territories/pr/tax/income/credits/earned_income/pr_earned_income_credit.py

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+from policyengine_us.model_api import *
+
+
+class pr_earned_income_credit(Variable):
+    value_type = float
+    entity = Person
+    label = "Puerto Rico earned income credit amount"
+    unit = USD
+    definition_period = YEAR
+    reference = "https://casetext.com/statute/laws-of-puerto-rico/title-thirteen-taxation-and-finance/subtitle-17-internal-revenue-code-of-2011/part-ii-income-taxes/chapter-1007-credits-against-tax/subchapter-b-refundable-credits/30211-earned-income-credit"
+    defined_for = "pr_earned_income_credit_eligible"
+
+    def formula(person, period, parameters):
+        p = parameters(
+            period
+        ).gov.territories.pr.tax.income.credits.earned_income
+
+        gross_income = person("pr_gross_income_person", period)
+        # if in the lower bracket: gross_income * rate. if higher, use max credit
+        phase_in = min_(gross_income * p.phase_in_rate, p.max_amount)
+        phase_out = p.phase_out_rate.calc(gross_income)
+
+        return phase_in - phase_out

policyengine_us/variables/gov/territories/pr/tax/income/credits/earned_income/pr_earned_income_credit_eligible.py

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+from policyengine_us.model_api import *
+
+
+class pr_earned_income_credit_eligible(Variable):
+    value_type = bool
+    entity = Person
+    label = "Puerto Rico earned income credit eligibility"
+    definition_period = YEAR
+    reference = "https://casetext.com/statute/laws-of-puerto-rico/title-thirteen-taxation-and-finance/subtitle-17-internal-revenue-code-of-2011/part-ii-income-taxes/chapter-1007-credits-against-tax/subchapter-b-refundable-credits/30211-earned-income-credit"
+
+    def formula(person, period, parameters):
+        # workflow: 
+        # WRITE ME:
+        # taxpayer or spouse must be 19 or older, not a dependent, not filing as married filing separately
+        p = parameters(
+            period
+        ).gov.territories.pr.tax.income.credits.earned_income.investment_income
+        head_or_spouse = person("is_tax_unit_head_or_spouse", period)
+        investment_income = person(
+            "pr_earned_income_credit_investment_income", period
+        )
+        investment_income_amount_under_limit = investment_income <= p.limit
+        return head_or_spouse & investment_income_amount_under_limit

policyengine_us/variables/gov/territories/pr/tax/income/credits/earned_income/pr_earned_income_credit_investment_income.py

@@ -0,0 +1,12 @@
+from policyengine_us.model_api import *
+
+
+class pr_earned_income_credit_investment_income(Variable):
+    value_type = float
+    entity = Person
+    label = "Puerto Rico earned income credit investment income"
+    definition_period = YEAR
+    unit = USD
+    reference = "https://casetext.com/statute/laws-of-puerto-rico/title-thirteen-taxation-and-finance/subtitle-17-internal-revenue-code-of-2011/part-ii-income-taxes/chapter-1007-credits-against-tax/subchapter-b-refundable-credits/30211-earned-income-credit"
+
+    adds = "gov.territories.pr.tax.income.credits.earned_income.investment_income.sources"

policyengine_us/variables/gov/territories/pr/tax/income/pr_gross_income_person.py

@@ -0,0 +1,10 @@
+from policyengine_us.model_api import *
+
+
+class pr_gross_income_person(Variable):
+    value_type = float
+    entity = Person
+    label = "Puerto Rico gross income person"
+    unit = USD
+    definition_period = YEAR
+    reference = "https://casetext.com/statute/laws-of-puerto-rico/title-thirteen-taxation-and-finance/subtitle-17-internal-revenue-code-of-2011/part-ii-income-taxes/chapter-1005-computation-of-taxable-income/subchapter-a-determination-of-net-income-general-concepts/30101-gross-income"