Move SC H4216 income tax reform to baseline

changelog.d/sc-h4216-baseline.added.md

@@ -0,0 +1 @@
+Move SC H4216 income tax reform from contributed reform to baseline, effective for tax years 2026 and later. This implements new tax rates (1.99%/5.21%), the SCIAD deduction with phaseout, and the 00 EITC cap.

policyengine_us/parameters/gov/states/sc/tax/income/credits/eitc/max.yaml

@@ -0,0 +1,13 @@
+description: South Carolina caps the state EITC at this amount.
+
+metadata:
+  unit: currency-USD
+  period: year
+  label: South Carolina EITC maximum cap
+  reference:
+    - title: SC H.4216 Section 7 - Section 12-6-3632
+      href: https://www.scstatehouse.gov/sess126_2025-2026/bills/4216.htm
+
+values:
+  0001-01-01: .inf
+  2026-01-01: 200

policyengine_us/parameters/gov/states/sc/tax/income/deductions/sciad/amount.yaml

@@ -0,0 +1,26 @@
+description: South Carolina provides the SC Income Adjusted Deduction (SCIAD) at these base amounts by filing status.
+
+metadata:
+  label: South Carolina SCIAD base amount
+  period: year
+  unit: currency-USD
+  breakdown:
+    - filing_status
+  reference:
+    - title: SC H.4216 Section 3 - Section 12-6-1140(15)(a)
+      href: https://www.scstatehouse.gov/sess126_2025-2026/bills/4216.htm
+
+SINGLE:
+  2026-01-01: 15_000
+
+SEPARATE:
+  2026-01-01: 15_000
+
+HEAD_OF_HOUSEHOLD:
+  2026-01-01: 22_500
+
+JOINT:
+  2026-01-01: 30_000
+
+SURVIVING_SPOUSE:
+  2026-01-01: 30_000

policyengine_us/parameters/gov/states/sc/tax/income/deductions/sciad/in_effect.yaml

@@ -0,0 +1,13 @@
+description: Whether the SC Income Adjusted Deduction (SCIAD) is in effect.
+
+metadata:
+  unit: bool
+  period: year
+  label: SC SCIAD in effect
+  reference:
+    - title: SC H.4216 Section 3 - Section 12-6-1140(15)
+      href: https://www.scstatehouse.gov/sess126_2025-2026/bills/4216.htm
+
+values:
+  0000-01-01: false
+  2026-01-01: true

policyengine_us/parameters/gov/states/sc/tax/income/deductions/sciad/phase_out/start.yaml

@@ -0,0 +1,26 @@
+description: South Carolina begins phasing out the SCIAD when federal AGI exceeds this threshold.
+
+metadata:
+  label: South Carolina SCIAD phase-out start
+  period: year
+  unit: currency-USD
+  breakdown:
+    - filing_status
+  reference:
+    - title: SC H.4216 Section 3 - Section 12-6-1140(15)(b)
+      href: https://www.scstatehouse.gov/sess126_2025-2026/bills/4216.htm
+
+SINGLE:
+  2026-01-01: 40_000
+
+SEPARATE:
+  2026-01-01: 40_000
+
+HEAD_OF_HOUSEHOLD:
+  2026-01-01: 60_000
+
+JOINT:
+  2026-01-01: 80_000
+
+SURVIVING_SPOUSE:
+  2026-01-01: 80_000

policyengine_us/parameters/gov/states/sc/tax/income/deductions/sciad/phase_out/width.yaml

@@ -0,0 +1,26 @@
+description: South Carolina fully phases out the SCIAD over this income range (the denominator in the phase-out formula).
+
+metadata:
+  label: South Carolina SCIAD phase-out width
+  period: year
+  unit: currency-USD
+  breakdown:
+    - filing_status
+  reference:
+    - title: SC H.4216 Section 3 - Section 12-6-1140(15)(b)
+      href: https://www.scstatehouse.gov/sess126_2025-2026/bills/4216.htm
+
+SINGLE:
+  2026-01-01: 55_000
+
+SEPARATE:
+  2026-01-01: 55_000
+
+HEAD_OF_HOUSEHOLD:
+  2026-01-01: 82_500
+
+JOINT:
+  2026-01-01: 110_000
+
+SURVIVING_SPOUSE:
+  2026-01-01: 110_000

policyengine_us/parameters/gov/states/sc/tax/income/rates.yaml

@@ -1,31 +1,38 @@
 description: South Carolina taxes the income of individuals at this rate.
+# Note: H.4216 Items 2-3 also include automatic rate reductions beginning
+# in 2027 if individual income tax revenues project to grow at least 5%
+# year-over-year. These future rate reductions are not modeled.
 brackets:
  - threshold:
      1994-01-01: 0
    rate:
      1994-01-01: 0.025
      2021-01-01: 0
+     2026-01-01: 0.0199
  - threshold:
      1994-01-01: 2_220
      2021-01-01: 3_110
      2022-01-01: 3_200
      2023-01-01: 3_330
      2024-01-01: 3_460
      2025-01-01: 3_560
+     2026-01-01: 30_000
    metadata:
       uprating: gov.irs.uprating
       rounding:
         type: downwards
         interval: 10
    rate:
      1994-01-01: 0.03
+     2026-01-01: 0.0521
  - threshold:
      1994-01-01: 4_440
      2021-01-01: 6_220
      2022-01-01: 16_040
      2023-01-01: 16_680
      2024-01-01: 17_330
      2025-01-01: 17_830
+     2026-01-01: .inf
    metadata:
       uprating: gov.irs.uprating
       rounding:
@@ -63,6 +70,8 @@ brackets:
 
 metadata:
   reference:
+    - title: SC H.4216 Section 1 - Section 12-6-510(C) (2026+)
+      href: https://www.scstatehouse.gov/sess126_2025-2026/bills/4216.htm
     - title: SC 1040 Instructions 2025
       href: https://dor.sc.gov/sites/dor/files/forms/SC1040Instr_2025.pdf#page=1
     - title: SC 2024 Income Tax Chart

policyengine_us/parameters/gov/states/sc/tax/income/subtractions/subtractions.yaml

@@ -4,28 +4,44 @@ values:
     - salt_refund_income
     - disability_benefits #include tax disability benefits
     - sc_net_capital_gain_deduction
-    - investment_in_529_plan  
+    - investment_in_529_plan
     - us_govt_interest
     - taxable_social_security
     - sc_military_deduction
     - sc_retirement_deduction
     - sc_senior_exemption
     - sc_young_child_deduction
-    - sc_dependent_exemption 
+    - sc_dependent_exemption
     # - Out of state income/gain
-    # - Volunteer deductions 
+    # - Volunteer deductions
     # - Active Trade or Business Income deduction
     # - Certain nontaxable National Guard or Reserve pay
     # - Negative amount of federal taxable income
-    # - Subsistence allowance 
+    # - Subsistence allowance
     # - Consumer Protection Services
-    # - Other subtractions 
+    # - Other subtractions
+  # H.4216 adds the SCIAD starting 2026
+  2026-01-01:
+    - salt_refund_income
+    - disability_benefits
+    - sc_net_capital_gain_deduction
+    - investment_in_529_plan
+    - us_govt_interest
+    - taxable_social_security
+    - sc_military_deduction
+    - sc_retirement_deduction
+    - sc_senior_exemption
+    - sc_young_child_deduction
+    - sc_dependent_exemption
+    - sc_sciad 
 
 metadata:
   unit: list
   period: year
-  label: South Carolina federal taxable income subtractions 
+  label: South Carolina federal taxable income subtractions
   reference:
+    - title: SC H.4216 Section 3 - Section 12-6-1140(15) (2026+)
+      href: https://www.scstatehouse.gov/sess126_2025-2026/bills/4216.htm
     - title: SC 1040 tax form instructions (2025)
       href: https://dor.sc.gov/sites/dor/files/forms/SC1040Instr_2025.pdf#page=8
     - title: SC 1040 tax form (2021)

policyengine_us/reforms/reforms.py

@@ -25,7 +25,6 @@
 from .states.ny.a04038 import create_ny_a04038_enhanced_escc_infants_reform
 from .states.ny.s9110 import create_ny_s9110_reform
 from .states.sc.h3492 import create_sc_h3492_eitc_refundable_reform
-from .states.sc.h4216 import create_sc_h4216_reform
 from .states.ny.a06774 import create_ny_a06774_enhanced_cdcc_reform
 from .states.ny.s04487 import create_ny_s04487_newborn_credit_reform
 from .harris.lift.middle_class_tax_credit import (
@@ -280,7 +279,6 @@ def create_structural_reforms_from_parameters(parameters, period):
     sc_h3492_eitc_refundable = create_sc_h3492_eitc_refundable_reform(
         parameters, period
     )
-    sc_h4216 = create_sc_h4216_reform(parameters, period)
     ny_a06774_enhanced_cdcc = create_ny_a06774_enhanced_cdcc_reform(parameters, period)
     ny_s04487_newborn_credit = create_ny_s04487_newborn_credit_reform(
         parameters, period
@@ -445,7 +443,6 @@ def create_structural_reforms_from_parameters(parameters, period):
         ny_a04038_enhanced_escc_infants,
         ny_s9110,
         sc_h3492_eitc_refundable,
-        sc_h4216,
         ny_a06774_enhanced_cdcc,
         ny_s04487_newborn_credit,
         middle_class_tax_credit,