Puerto Rico Earned Income Credit

Fixes #5467

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

@@ -1,4 +1,4 @@
-description: The earned income credit will be denied if the sum of the following forms of income is greater than the max limit.
+description: Puerto Rico will deny the earned income credit if the sum of the following forms of income is greater than the defined maximum limit.
 values:
   2010-12-31: 
   - interest_income
@@ -8,7 +8,8 @@ values:
   - child_support_received
 metadata:
   unit: list
-  label: Puerto Rico income sources to calculate for credit denial criteria for earned income credit
+  period: year
+  label: Puerto Rico investment income sources to calculate for credit denial criteria for earned income credit
   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

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

@@ -1,4 +1,4 @@
-description: Puerto Rico 
+description: Puerto Rico allows a maximum amount of credit for the earned income credit.
 values: 
   2010-12-31: 350
   2011-12-31: 400
@@ -9,7 +9,7 @@ values:
 
 metadata:
   unit: currency-USD
-  label: Puerto Rico earned income credit maximum amount
+  label: Puerto Rico earned income credit max amount
   period: year
   reference:
     - title: P.R. Laws tit. 13, § 30211 (1)-(6)

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

@@ -1,9 +1,9 @@
-description: The following is the maximum amount allowed in certain forms of income (i.e. child support payments, interest) to receive the earned income credit.
+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 maximum investment income to receive earned income credit
+  label: Puerto Rico max investment income to receive earned income credit
   period: year
   reference:
     - title: P.R. Laws tit. 13, § 30211 (e)

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

@@ -1,4 +1,4 @@
-description: Puerto Rico has a phase in rate to determine the amount of earned income credit for people that have an income below a certain limit. 
+description: Puerto Rico has a phase in rate for the earned income credit. 
 values: 
   2010-12-31: 0.035
   2011-12-31: 0.04

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

@@ -1,14 +1,17 @@
-description: Puerto Rico has a phase out rate to calculate on any income greater than a certain limit.
+description: Puerto Rico has a phase out rate for the earned income credit. 
 brackets:
-  - threshold: # if below the threshold, no phase out
+  # if below the threshold, no phase out
+  - threshold: 
       2010-12-31: 0
     rate:
       2010-12-31: 0
-  - threshold: # if in the middle bracket, phase out percentage which subtracts from phase in part
+  # 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
-  - threshold: # no percentage rate for any amount of income above upper limit
+  # 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
@@ -20,6 +23,7 @@ brackets:
 metadata:
   rate_unit: /1
   threshold_unit: currency-USD
+  type_marginal: marginal_rate
   label: Puerto Rico earned income credit phase out rate
   period: year
   reference:

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

@@ -0,0 +1,47 @@
+- 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_amount: 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_amount: 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_amount: 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_amount: 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_amount: 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_amount: 320

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

@@ -0,0 +1,23 @@
+- name: Dependent
+  period: 2024
+  input:
+    is_tax_unit_head_or_spouse: true
+    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: false
+    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_credit_amount.py

@@ -1,34 +1,22 @@
 from policyengine_us.model_api import *
 
-class pr_low_income_credit(Variable):
+class pr_earned_income_credit_amount(Variable):
     value_type = float
     entity = Person
-    label = "Puerto Rico earned income credit"
+    label = "Puerto Rico earned income credit amount"
     unit = USD
     definition_period = YEAR
-    reference = ""
+    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(tax_unit, period, parameters):
         p = parameters(
             period
         ).gov.territories.pr.tax.income.credits.earned_income
 
-        # workflow:
-        # Calculate credit amount pre phase out
-        # Income * phase_in_rate capped at max_credit
-        # Calculate the phase_out
-        # p.phase_out_rate.calc(income)
-        # Calculate final value
-        # credit - phase_out
-        earned_gross_income = 10_000 # PLACEHOLDER for earned gross income, person level
+        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)
 
-        # calculate phase in 
-        # what does p.phase_out_amount.threshold return? which threshold? 
-        upper_threshold = p.phase_out_amount.threshold[] 
-        # if gross income > upper threshold, calculate [bottom threshold * phase_in] - [(upper - bottom threshold) * phase_out]
-        # if gross income > lower threshold, calculate [bottom threshold (i.e. 10k) * phase_in] - [(income - bottom threshold) * phase_out]
-        # ELSE, calculate income * phase_in_rate
-
-
-        return False
+        return phase_in - phase_out

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

@@ -3,16 +3,15 @@
 class pr_earned_income_credit_eligible(Variable):
     value_type = bool
     entity = Person
-    label = ""
+    label = "Eligible person for Puerto Rico earned income credit"
     definition_period = YEAR
-    reference = ""
+    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):
         p = parameters(
             period
         ).gov.territories.pr.tax.income.credits.earned_income
         head_or_spouse = person("is_tax_unit_head_or_spouse", period)
-        adds = "gov.territories.pr.tax.income.credits.earned_income.ineligible_income_categories"
-        investment_income_amount_allowed = adds < p.max_investment_income 
-        # check that earned income is above 0?
-        return head_or_spouse & investment_income_amount_allowed
+        investment_income = person("pr_earned_income_credit_investment_income", period)
+        investment_income_amount_under_limit = investment_income < p.max_investment_income 
+        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 +1,16 @@
+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
+    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):
+        p = parameters(
+            period
+        ).gov.territories.pr.tax.income.credits.earned_income
+        # sum up all defined categories for investment income
+        adds = "gov.territories.pr.tax.income.credits.earned_income.ineligible_income_categories"
+        return adds

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

@@ -0,0 +1,10 @@
+from policyengine_us.model_api import *
+
+
+class pr_gross_income(Variable):
+    value_type = float
+    entity = Person
+    label = "Puerto Rico gross income person level"
+    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"