CA income tax difference with TAXSIM35

[martinholmer]

The following integration test fails. It is not yet known whether the
tax logic problem is in TAXSIM35 or in the current PEUS code, or
whether there are problems in both models. This topic is meant to
facilitate discussion of why this test fails, primarily by reporting
the results of hand calculations required to fill out the relevant tax
form.

- name: Tax unit with taxsimid 22380 in k21.its.csv and k21.ots.csv
  absolute_error_margin: 0.01
  period: 2021
  input:
    people:
      person1:
        age: 67
        employment_income: 18010
        qualified_dividend_income: 9010
        taxable_interest_income: 11010
        short_term_capital_gains: 10010
        rental_income: 1010
        taxable_private_pension_income: 2000
        social_security_retirement: 12000
        real_estate_taxes: 24000
        mortgage_interest: 3000
        self_employment_income: 51010
        business_is_qualified: true
        business_is_sstb: true
        w2_wages_from_qualified_business: 100e6
        ssi: 0  # not in TAXSIM35
        state_supplement: 0  # not in TAXSIM35
        wic: 0  # not in TAXSIM35
        ma_covid_19_essential_employee_premium_pay_program: 0  # not in TAXSIM35
      person2:
        age: 11
        ssi: 0  # not in TAXSIM35
        state_supplement: 0  # not in TAXSIM35
        wic: 0  # not in TAXSIM35
        ma_covid_19_essential_employee_premium_pay_program: 0  # not in TAXSIM35
      person3:
        age: 11
        ssi: 0  # not in TAXSIM35
        state_supplement: 0  # not in TAXSIM35
        wic: 0  # not in TAXSIM35
        ma_covid_19_essential_employee_premium_pay_program: 0  # not in TAXSIM35
      person4:
        age: 16
        ssi: 0  # not in TAXSIM35
        state_supplement: 0  # not in TAXSIM35
        wic: 0  # not in TAXSIM35
        ma_covid_19_essential_employee_premium_pay_program: 0  # not in TAXSIM35
      person5:
        age: 16
        ssi: 0  # not in TAXSIM35
        state_supplement: 0  # not in TAXSIM35
        wic: 0  # not in TAXSIM35
        ma_covid_19_essential_employee_premium_pay_program: 0  # not in TAXSIM35
    tax_units:
      tax_unit:
        members: [person1, person2, person3, person4, person5]
        premium_tax_credit: 0  # not in TAXSIM35
        local_income_tax: 0  # not in TAXSIM35
        state_sales_tax: 0  # not in TAXSIM35
        ca_use_tax: 0  # not in TAXSIM35
        il_use_tax: 0  # not in TAXSIM35
        nm_2021_income_rebate: 0  # not in TAXSIM35
        nm_additional_2021_income_rebate: 0  # not in TAXSIM35
        nm_supplemental_2021_income_rebate: 0  # not in TAXSIM35
        ny_supplemental_eitc: 0  # not in TAXSIM35
        ok_use_tax: 0  # not in TAXSIM35
        pa_use_tax: 0  # not in TAXSIM35
        vt_renter_credit: 0  # not in TAXSIM35
    spm_units:
      spm_unit:
        members: [person1, person2, person3, person4, person5]
        snap: 0  # not in TAXSIM35
        tanf: 0  # not in TAXSIM35
    households:
      household:
        members: [person1, person2, person3, person4, person5]
        state_fips: 6  # CA
  output:  # expected results from patched TAXSIM35 2024-02-25 version
    ca_income_tax: 1146.34

[PavelMakarchuk]

@martinholmer Thank you for the integration test.

I am not 100% clear on where the dif in this case is coming from
PE and TAXSIM align on the taxable income amount: $ 71,456.26
PR and TAXSIM also align on the amount of credits: $ 1,858

Looking at the head of household tax schedule:

I believe the amount of income tax before credits should be: $ 2,094.
Which then reduced by the credits will amount to the PE amount.

I wonder, does TAXSIM assign an AMT amount here?

[martinholmer]

@PavelMakarchuk said in discussion topic $4120:

I am not 100% clear on where the dif in this case is coming from
PE and TAXSIM align on the taxable income amount: $ 71,456.26
PR and TAXSIM also align on the amount of credits: $ 1,858

Seems clear that the tax difference is caused by the two models computing different tax before credits amounts even though they agree on taxable income.

Your next step is to fill out a form to see which model is wrong.

[PavelMakarchuk]

@yedeer12 could you take a look